Lack of incentives and regulations disadvantage geothermal in Italy

In an open letter to the new Minister for Ecological Transition in Italy, Roberto Cingolani, the Italian Geothermal Union (Unione Geotermica Italiana) points to the need for effective energy planning that includes geothermal technologies. The lack of clarity on incentives in the support of geothermal energy similar to other renewable energy technologies has been a contentious topic in Italy, as we have been reporting.

For many years, the lack or limited effectiveness of incentives and still inadequate legislation have strongly slowed the development of geothermal technologies in Italy, putting the originals on the run competences of the Italian industrial chain, jeopardizing the investments already planned and limiting it market and employment development. The reduced production is at the expense of energy efficiency and global environmental system, as geothermal energy offers effective, sustainable and resilient solutions to problem of energy supply, both thermal and electrical. UGI continues its action of concrete proposals for the progress of geothermal in the short and long term and asks for a meeting of deepening – so Dr. Adele Manzella, President of the Italian Geothermal Union

Letter:

The Italian Geothermal Union (UGI), on behalf of its members (Companies and Associations, academics and professionals in the field of geothermal energy) expresses best wishes to you for your work and welcomes the action elements announced by the President of Italy, which are a reason for trust and satisfaction. The institution of the ministry entrusted to you is part of the appreciated vision that the new government foresees.

We fully agree with the announced commitment to complete the National Plan for Recovery and Resilience (PNRR), with regard to its strategic objectives and in line with the European mission to produce an acceleration of the energy transition also in Italy to achieve a 55% cut in climate-changing emissions by 2030.

We expect that Plan, as in all energy planning documents currently under development, is given the proper emphasis on geothermal technologies. [According to separate news, the plan indeed foresees some geothermal elements]

In particular, we refer to the two main applications of electricity generation and of space heating and cooling – two sectors that are still extremely strong in Italy dependent on fossil fuels. Geothermal energy offers effective, sustainable and resilient solutions. Its characteristics of stability and continuity in delivery is an element fundamental for the planning of the renewable energy mix which has been talked about for years in Italy and which today still struggles to be fully realized.

According to the concrete and immediate objectives, we bring to your attention some dysfunctions that they not only slow down, but in many ways even hindering the development of geothermal energy [projects] in Italy.

1. The lack of effective incentives

• In the thermal sector, incentives are only partially usable by geothermal technologies, which above all need financial support to meet the up-front costs of plants. The great efficiency allows them to recover the initial cost quickly. The 110% Bonus is an excellent incentive tool, which we hope can be used, even in the form of a guarantee, in the long term, to allow the full development of systems and professionalism in the [heat] pump sector of geothermal heat (geothermal heat exchange systems). On the other hand, there are no effective incentives to promote district heating and cooling in urban areas, the use of which already guides urban planning and industrial policy choices in other European countries.
• In the electricity sector, the discriminatory exclusion of geothermal from the support system intended to finance renewable sources and technologies (FER1 decree) and the prolonged wait of the FER2 decree have frozen support for geothermal technologies. It is learned from press reports that, in the context of the Milleproroghe Decree, for the two-year period 2020-2022 incentives for pilot geothermal plants are not available anymore: if this is confirmed, the
  geothermal technologies, which were already the least encouraged among renewable sources, they would be the only renewable technologies to be excluded from incentives in Italy. A unique case in Europe and in the world.

2. The lack of an adequate regulatory regime

• The decree for the design and construction of geo-exchangers (the so-called “Decree probe-laying “), based on Legislative Decree 28/2011 had to be approved within three months of entry in force and still follows an uncertain process between the ministries of reference.
• The authorization process for projects that use geothermal resources of national interest and locally is so complex and tortuous as to totally debase the time formally foreseen by law. Outside the already available concession areas – where, however, the few authorization applications that have been concluded have had very long authorization times, none of the dozens of applications underway in the last decade have come to fruition, despite the positive technical opinions.

These gaps, in addition to the uncertainty due to the expected deadlines of the geothermal concessions for electricity production, not only slow down but even prevent the technical and scientific development of both electrical and thermal use of an important renewable resource such as geothermal. This causes the abandonment of investments and the consequent lack of technical and employment development.

In the electricity sector, they totally undermine the investments planned for new plants (both flash technology and total reinjection) and for the upgrading of existing ones. This has a strong negative impact on the maintenance and development of a sector that today counts thousands of direct and indirect jobs, in addition to thousands of other jobs deriving from related activities. And mostly Italians: geothermal energy boasts, in fact, national technologies and activities to the point of being able to speak of an “Italian [value] chain”, a term that is difficult to use for other renewable energy technologies in Italy. This characteristic risks being lost with serious economic and employment consequences.

In the thermal sector, and in particular with regard to thermal uses in buildings, uncertainties and gaps determine an unjustifiably limited development compared to what is happening in other European countries. The reduced production is detrimental to the overall energy and environmental efficiency of the system and jeopardizes the development of a solid market and the corresponding employment impact, despite the great skills of Italy and the technical, economic and environmental benefits recognized in the sector.

The UGI is an independent association created to disseminate among the public, operators and appropriate political and administrative levels the correct knowledge of the geothermal resource, of the technologies and the economic, environmental and social consequences of efficient use, as well as sustainable development of this important national renewable energy source.

We are saddened to observe the little attention to or even opposition to geothermal technologies, and we believe it may be attributable to a deep mistrust, fueled by fears  that the lack of knowledge of such a complex subject nourishes and strengthens.

We will be very happy to bring further information and data on the topics mentioned here to your attention, offering a contribution of ideas and experiences to the work in progress for the improvement of PNRR and energy policy. In consideration of the great development potential of geothermal in Italy, our intent is to propose concrete actions for the progress of geothermal in the short and long term, providing a decisive boost to the energy revolution in Italy.

In renewing our best wishes for a good work, UGI remains available to your Ministry and requests a first in-depth meeting.

With best regards,
The UGI Council – Adele Manzella (President), Riccardo Corsi (Vice President), Bruno Della Vedova, Renato
Papal, Antonio Trivella, Maurizio Vaccaro (Treasurer), Giampaolo Vecchieschi

Original letter in Italian (pdf)