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The future of Energy

Meeting and debate with Marco Alverà
San Donato Milanese (MI), 22/06/2017, Meeting for The Aspen Junior Fellows

The starting premise of proceedings at this Meeting for The Aspen Junior Fellows group was that any discussion regarding energy of the future entails an examination of technological considerations as well as geopolitical prospects, both of which were seen as hinging on the energy transition currently underway. The major global spinoffs of this, such as cutbacks in CO2 emissions, together with the reduction of pollutants that contaminate air quality at a local level and have an immediate impact on the health of populations, go hand-in-hand with issues such as Italy’s competitiveness and energy dependence. Held up as confirming the topical relevance of these issues was Italy’s new draft National Energy Strategy (NES), which is currently the subject of government consultation and accords a more central role to gas.

Indeed, the Strategy sees gas becoming a back-up resource for renewable sources, and assuming greater importance as the share of renewables in the energy mix increases. In this regard, it was remarked that one of the main benefits of gas is flexibility, bearing in mind how the gas reserves situation has changed as a result of the development of shale gas and the discovery of new deposits in Israel, Egypt, Mozambique, and Tanzania.

Gas is not only viewed as a back-up reserve, but as a primary source in the transport sector. In the short to medium term, ships and, increasingly, cars and other vehicles, could be fueled by gas. In this respect, there was some discussion of the role of electric cars versus gas-fueled cars, with the suggestion made that, in the future, these two fuel-source models might carve up the market equally, once batteries are able to deliver greater performance and prove their market competitiveness.

It was highlighted that while gas makes it possible to ensure greater energy security, it requires further diversification of supply routes. The Trans Adriatic Pipeline (TAP) was cited as a project that remains under discussion due to strong opposition from local communities. The participants envisaged that its construction would put Italy in a position to become a European hub by enabling a reverse flow of gas (specifically, through South to North exports). This interconnection, coming from the Caspian Sea and passing through the region of Apulia, would diversify the sources of origin or transit countries for gas pipelines, in the face of a Middle Eastern scenario that continues to be fraught with unknowns. The project would also have the effect of lowering the energy costs of Italians through the fact that infrastructure costs would be shared with the other European countries involved. This would thereby reduce Italy’s gap in gas costs vis-à-vis the United States and Russia and accordingly safeguard the competitiveness of Italian industry.

Lastly, it was observed that competitiveness, environment, and security are the macro-priorities enshrined in the National Energy Strategy. The role proposed for gas would, in pursuance of those priorities, contribute to improving supply security and systemic flexibility, reducing the energy price gap, and decarbonizing the transport sector.