Energy & Infrastructure Alert | April.29.2021
On April 27, 2021, the Italian Parliament, in both Chambers, Representative and Senate, approved the National Recovery and Resilience Plan. Now the Government shall submit within April 30th the Plan to the European Commission for its final approval and the financing.
The NGEU (Next Generation EU) marks a transformative change for the EU and can be considered as the new Marshall Plan for Europe (and for Italy). The amount of resources deployed to boost growth, investment and reforms amounts to 750 billion €, of which more than half, 390 billion€, are grants.
The NGEU program includes two main instruments to support member states. The REACT-EU is designed with a shorter-term perspective (2021-2022) to help them in the initial phase of revitalizing their economies. The RRF (Recovery and Resilience Facility), on the other hand, has a six-year duration, from 2021 to 2026. Its total size is 672.5 billion€.
In particular, the RRF Regulation sets six main areas of intervention (pillars) on which the National RRPs should focus on:
Mission 1: Digitalization, Innovation, Competitiveness, Culture (40,73 billion€)
Component 1: digitilization, innovation and security in the public sector
Component 2: digitilization, innovation and competitiveness in the productive system
Component 3: tourism and culture 4.0
Mission 2: Green Revolution and Ecological Transition (59,33 billion€)
Component 1: circular economy and sustainable agriculture
Component 2: renewable energy, hydrogen, grid and sustainable mobility
Component 3: energy efficiency and building renovation
Component 4: protection of land and water resources
Mission 3: Infrastructures for Sustainable Mobility (25,13 billion€)
Component 1: investments in the railway network
Component 2: intermodality and integrated logistics
Mission 4: Education and Research (30,88 billion€)
Component 1: enhancement of education services: from kindergartens to universities
Component 2: research for the enterprises
Mission 5: Inclusion and Cohesion (19,81 billion€)
Component 1: employment policies
Component 2: social infrastructure, families, communities and third sector
Component 3: special interventions for territorial cohesion
Mission 6: Health (15,63 billion€)
Component 1: proximity networks, facilities and telemedicine for territorial health care
Component 2: innovation, research and digitalization of the national health service
The PNRR envisages also the need for important reforms for the Italian social and economic system, namely: horizontal reforms for improving equity, efficiency and competitiveness, as those of the public administration and of the judiciary system; enabling reforms pivotal for ensuring the implementation of the Plan, as the simplification of public contracts, simplification and rationalization of environmental regulations, simplification in the field of construction and urban planning, simplification for investments in Southern Italy and the reforms of public procurement and competitiveness. These reforms will be matched by other reforms as the fiscal reform and the Family Act.
FOCUS ON MISSION 1 (Green Revolution and Ecological Transition):
COMPONENT 1 (circular economy and sustainable agriculture)
In this Component only some selected projects hold interest for renewable energy sources, as follows:
COMPONENT 2 (renewable energy, hydrogen, grid and sustainable mobility)
Areas of intervention/measures:
1. Increase of the share of energy produced by renewable energy sources:
Agro-voltaic development: the objective of these investments is to install a production capacity from agro-voltaic plants of 2GW, which would produce around 2,500 GWh per year, with a reduction in greenhouse gas emissions estimated at around 1.5 million tons of CO2.
2. Enhancement and digitilization of the grid infrastructure
3. Promoting hydrogen production, distribution and end-uses: investments on hydrogen aim at developing 1GW of electrolysis by: i) promoting the local use of hydrogen (e.g. for local means of transport) ii) create “hydrogen valleys” namely industrial areas with an economy based on the use of hydrogen (estimated production: 1to 5 MW per valley) iii) use of hydrogen in hard-to-abate sectors (e.g. for chemicals products and oil refining) vi) implementation of refuelling station for hydrogen to be used by cars and trucks vii) to convert railways into hydrogen (most advanced projects are in Valcamonica and Salento) viii) to abate regulations that represent an obstacle for the use of hydrogen (e.g. simplifying administrative procedures for the implementation of small green hydrogen plants) ix) boost the competitiveness of hydrogen through tax incentives, “green tax” and measures that could increase the use of hydrogen in public transportation.
4. Developing more sustainable local transportations
Investments on sustainable local transports aim at, inter alia, developing: 7.500 fast recharging stations in highways, 13.755 in urban areas and 100 recharging experimental stations based on storage technologies.
5. Developing international industrial and R&D leadership in key transition supply chainsIn this area of investments large private and public investments are foreseen in the following sectors: i) photovoltaic and wind power onshore (i.e. estimated increase by 15 GW by 2025 and estimated increase of photovoltaic plants capacity from 21 GW to more than 52 GW ii) storage technologies iii) installation of 5 GW of electrolysis capacity by 2030 iv) patents for new technologies.