SCENARIO AND GROWTH DRIVERS Home Investors Strategy Scenario and growth drivers Share Our strategy is set in an international context in which the energy transition and decarbonisation are key elements in the fight against climate change A necessary and urgent shift. The energy model that global growth has been built on in recent years has ceased to be sustainable, and that’s why there is a need for a global commitment to decarbonise progressively and as quickly as possible through making all energy sectors more efficient. The frequency and intensity of extreme natural events, together with the increasingly insistent recommendations of the international scientific community, are prompting a growing sensibility and awareness in public opinion, in a context that has favoured international agreements and the definition of concrete policies and measures in the fight against climate change. The United Nations and the European Union have determined that, in the coming years, the electricity system should be sustainable, decarbonised and characterised by a predominance of renewable sources. The Paris Climate Agreement has further reinforced the focus on renewable energy sources in order to limit global warming. The Green New Deal accelerates the European Union's commitment to climate, establishing the goal of climate neutrality for 2050 and the revision of the European Union objectives to 2030, in terms of reducing emissions, to at least 55% (compared to the 40% envisaged by the previous Clean Energy Package). Italy's Integrated National Energy and Climate Plan (PNIEC) aims for 30% of gross final consumption to be met from renewable sources (RES) by 2030 and a reduction of 43% in primary energy consumption and 39.7% in final energy consumption. On the emissions front, the target is a 33% reduction in greenhouse gases across all sectors. In this new scenario, Terna takes on the crucial role of enabler of the transformation that’s under way, because the - albeit gradual - decommissioning of coal plants, together with the growing penetration of renewable sources, will provide one of the main contributions to achieving decarbonisation objectives. The production of energy from fossil sources is in fact one of the factors most responsible for greenhouse gas emissions caused by human activities (including CO2), recognised as the cause of significant environmental and climatic impacts, including the increase in global average temperature and the intensification of catastrophic natural events. The gradual decrease in thermoelectric generation capacity, with the decommissioning of an important share of conventional plants, and the gradual increase in renewable generation capacity have a significant impact on the electricity system of any country, in particular on the management of the grid by transmission network operators (TSOs) such as Terna. As if we had the role of director of an increasingly complex system, our group continues to invest to ensure an increasingly modern, efficient, safe, flexible and sustainable electricity grid, also affirming the weight of Italy as the European energy hub of the Mediterranean area. And this strategy is based on the skills of our people and on the ability to innovate, which are Terna's great added value. Our mission is therefore to play a leadership role in the energy transition through innovation and unique skills and technologies, with the aim of generating value for our stakeholders. To cope with the changes brought about by the new energy context, Terna will have to focus on five key areas for the system: Safety, Adequacy, Service Quality, Resilience and Efficiency. ROLE OF TSO Security the electricity system’s ability to withstand changes in its operating status following sudden disturbances, without violating the system’s operating limits. Adequacy the system’s ability to satisfy electricity demand while complying with safety and quality of service requirements. Quality of service the ability to ensure the continuity and quality of service. Resilience the system’s ability to withstand stresses above its set limits and to return to normal operating status, possibly with temporary actions. Efficiency the ability to operate the electricity system in compliance with the requirements of security, adequacy and quality, at the minimum total cost to the citizen/user. Our 2021-2025 Industrial Plan represents our answer to the extraordinary challenge we face. We have indeed decided upon a further acceleration of infrastructure investments to drive the energy transition: we will invest € 8.9 billion on national electricity infrastructure, our highest investment plan ever, with an approach that combines sustainability, developing skills and promoting innovation. In the coming 10 years, as forecast in our National Development Plan, we will invest over 18 billion euros on the Italian grid, part of the € 1 trillion that is expected to be invested across Europe as part of the Green New Deal. CHALLENGES FOR THE ELECTRICITY SYSTEM The energy transition sets up major challenges for the TSOs, which must maintain the current high levels of quality of the electricity service, while at the same time avoiding an excessive increase in costs for citizens and businesses: renewable sources are non-programmable: the intermittent nature of wind production in particular makes dispatching more difficult; renewable sources are concentrated in the south of Italy, whereas most demand comes from the north. This requires solutions to congestion problems, better integration of renewable sources into the grid, and consolidating the South-North backbone; changes in the context (increase in renewable energy sources or "RES", decommissioning of thermoelectric plants, climate change) already cause - and to a greater extent in future scenarios - significant impacts on the management of the grid by the TSO, which has the delicate task of balancing electricity production and demand at all times, guaranteeing consumers a safe, constant and reliable supply of energy; these problems are amplified in their effects by the structural characteristics of the Italian electricity grid which, due to the geographical profile of the country (poor possibility of interconnection with the European continent, transit constraints between Northern and Southern Italy and with the islands), will make the management of the electricity system in the new conditions even more complex. These impacts are attributable to four macro categories: CHALLENGES IMPACTS RES Intermittency Reduction of adequacy margins Increasing periods of over-generation Increasing steepness of residual evening ramp RES geographical distribution Increasing grid congestions Growing system operation challenges, due to growing Distributed Generation RES technical characteristics Reduction of system inertia Reduction of resources providing frequency and voltage regulation Extreme weather events Increasing risk of local disruptions To face these challenges, all the main players in the energy sector will have to work in an increasingly systematic way and in coordination with each other, with the aim of implementing a series of actions that make it possible to guarantee the adequacy, quality, the efficiency and sustainability of the system. OUR ACTION PLANS The actions and operations identified to achieve the national decarbonisation objectives can be traced back to four categories of action: INVESTMENT IN THE GRID Upgrade of the northsouth backbone and strengthening of the grid serving the south and islands Investment in voltage regulation and increased system inertia Overseas interconnections Work on resilience Improvements to core competencies LONG-TERM PRICE SIGNALS Capacity market to promote investment in new-generation thermoelectric plants Auctions and long-term power purchase agreements (PPAs) for renewable plants Fixed-term contracts awarded through competitive auctions for new storage capacity, including hydroelectric MARKET EVOLUTION AND INTEGRATION Evolution of the structure and products traded on the services market to meet new needs (voltage regulation and inertia) Participation of “new” resources providing flexibility for the dispatching services market: demand, distributed generation, storage Progressive integration with European services markets INNOVATION AND DIGITALISATION Digitalisation of the transmission grid (assets and processes) and of management of the electricity system In our industrial plan we have given the utmost priority to all activities that allow Italy to face energy challenges in a secure, efficient and sustainable way through innovation and new technologies, in addition to taking advantage of the specific characteristics of the Italian territory. TERNA IS THE FIRST GRID OPERATOR FOR ELECTRICITY TRANSMISSION IN EUROPE. WE PROMOTE THE ENERGY TRANSITION AND SUSTAINABLE DEVELOPMENT BY FOCUSING ON PEOPLE AND INNOVATION. We work every day to build an atmosphere of dialogue and trust in local areas, to which we bring a vital asset for everyone’s economic and social lives: electricity. > FIND OUT MORE Useful links CALENDAR GENERAL ARCHIVE CERT REAL ESTATE ASSETS ACCESSIBILITY PRIVACY COOKIE DECLARATION LEGAL NOTICE INSERT CV Portals PURCHASES SUPPLIERS QUALIFICATION GAUDI GSTAT ENERGY DISTRIBUTORS MY TERNA TITOLARI RTN OUR SITES: OPEN AND TRANSPARENT SETTLEMENT CERTIFICATION WHISTLEBLOWING TERNA PLUS TERNA S.p.A. - Capitale sociale € 442.198.240 interamente versato - Sede Legale in Italia, Viale Egidio Galbani, 70 - 00156 Roma - Tel +39 06 83138111 Registro delle Imprese di Roma - Codice fiscale e Partita IVA 05779661007 - R.E.A. di Roma 922416