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    Italy Power SWOT

    May 9, 2022 - Fitch Solutions Sector Intelligence


      THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

      Italy Power SWOT

      • 09 May 2022
      • Italy
      • Power
      SWOT Analysis


      • Vast and increasingly liberalised power market, with several players competing in the generation sector.
      • Italy's natural characteristics give the country significant potential for solar, wind and geothermal power generation.
      • Italy has very high levels of energy efficiency in its buildings, industry and transportation sector.
      • EU energy and climate targets provide investors with some long-term visibility on decarbonisation, renewables and power trade.
      • Italy has seen a large deployment of smart meters, and establishing a smart grid will facilitate the integration of renewables into the electricity mix.


      • Local governments have the authority to veto power and infrastructure projects, a potential cause of implementation delays.
      • The absence of nuclear and high non-hydro renewables penetration make Italian retail electricity prices among the highest in Europe.
      • Structural issues will result in slow growth in economic activity over the coming decade, which will weigh on power demand.
      • Growth in new power generation plants will be limited to the renewables sector, and potentially the development of some natural gas-fired capacity.
      • Relatively high levels of corruption and cronyism in certain areas of the economy have led to inefficiency and insufficient allocation of resources.


      • Smart meters, batteries, energy efficiency and distributed energy solutions to gain greater importance in the market in line with focus on cost-cutting and green energy goals.
      • EU power grid goals and Italy's higher prices compared to its neighbours create opportunities in power trade and building new interconnections.
      • The government has introduced a new auction and incentive scheme for solar renewable projects.
      • The planned introduction of a capacity market, also included in the government's 2030 energy strategy, should support gas-fired thermal power generation.
      • Overwhelming parliamentary support for new government formed under Prime Minister Mario Draghi will boost policymaking.
      • Following the Russian invasion of Ukraine, a drive across the EU to reduce the need for Russian gas imports will pose direct upsides for renewable capacity growth.


      • Overlapping authorities between regional and central governments over energy issues can complicate the operational environment.
      • Increasing energy efficiency will result in weak growth in power consumption over the coming decade.
      • Although the phase-out of coal power by 2025 is included in Italy's energy strategy to 2030, its implementation faces risks.
      • A strong anti-establishment movement is gathering pace in Italian society across the ideological spectrum and particularly among younger portions of the electorate, leading to a progressive empowerment of populist apolitical figures.
      • An overreliance on imported gas will pose deep downside risks to the gas fired power sector, particularly as Russia is a large supplier.
      This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.


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