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Current trends for Italian national and local power companies: prospects for Integrated Resource Planning?

Panel: Panel 1: Policy and Programmes - Who can deliver DSM?

Authors:
Lorenzo Pagliano, Politecnico di Milano and Ambiente Italia Research Institute
Angelica Tudini, Ambiente Italia Research and Italian National Statistics Institute
Joseph Eto, Lawrence Berkeley Laboratory
Roberto Caponio, Ambiente Italia Research Institute

Abstract

The power industry is undergoing major changes world-wide. In Italy, reforms under way include changes in the form of utrlity ownership, creation of a regulatory body and definition of its tasks and powers, changes in criteria for setting rates, limited incentives for energy saving and renewables, and the possibility of coupling energy with other services such as water or waste management. The national power company, ENEL, one of the largest state companies and one which has dominated the Italian economic system for decades, is being privatised and vertical disvestiture is under debate. Several local energy companies have already or are in the process of changing their ownership structure.

The paper evaluates the prospects for adopting an Integrated Resource Planning approach in Italy - consistent with the strategy adopted by many other industrialised countries, notably the United States, and with the forthcoming European scheme for IRP (Coiling 1994) - both at the national and local level. Although the overall picture is still far from clear, our analysis suggests that the situation at the national level is different from the local one. One of the objectives of the privatisation of the national energy industry is the desire to increase the efficiency of the entire system by which energy is supplied and utilised. This could well accommodate more opportunities for introducing IRP. However, objectives other than efficiency (in particular, raising money to reduce the budget deficit) are also important and very.high in the priorities of policy makers. These objectives seem to push toward different outcomes. For example, sale of monopoly franchise will raise more money than will sale of a number of smaller, more competitive firms. The final outcome will depend on the importance attached to each objective. Althoughlocal utilities are affected by what happens to the national industry, their current organisation - one which often involves integrating several services - already appears to offer more opportunities for IRP.

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