Energy market
In the national electricity market, demand for electricity in 2021 was 319,389 GWh (Terna data), an increase of +5.5% over the previous year. This rise, happening in a context of progressive economic recovery, was a rebound from the reduced electricity load recorded in 2020 due to the national lockdown designed to halt the spread of Covid-19.
Energy production in 2021, net of self-consumption and consumption by pumping, stood at 249,251 GWh, up by 2.0% from 2020. It covered 78% of the requirement, against a significant increase in net imports during the year, which recovered from the collapse of 2020, recording 42,755 GWh (+33%) and contributing 13.4% to satisfying demand. Production from thermoelectric sources, which fell in the first nine months of 2021 compared with 2020, increased its share in the last quarter to 157,363 GWh (+3.8%), in parallel with a gradual reduction in the water contribution from its start of the year peak (45,454 GWh, - 4.2%) and photovoltaic sources (20,062 GWh -1%). Wind power in 2021 increased by about 12 percentage points (20,841 GWh) compared to the previous year, while production from geothermal sources declined (5,527 GWh - 2.1%).
The Single National Price (PUN) in 2021 averaged at 125.46 €/ MWh, showing an exceptional +222% increase from 2020, driven by the doubling of the price of CO2 and especially the explosion of gas prices. In fact, the dual effect of the recovery of the commodity sector in 2021 and the major contraction caused by Covid in 2020 was added to by the effects of the Global Energy Crunch, which culminated in the gas supply crisis and the unprecedented escalation of related commodity prices.
In the second and third quarters electricity prices rose on average by around 200% compared to the previous year, but the most shocking hike occurred in the last quarter, with an increase of almost 400% compared to the same period in 2020. Hourly highs of €533.19/MWh and daily averages of €437.34/MWh were recorded (both on 22 December 2021).
MGP: Prezzo Unico Nazionale (PUN)
The increase in energy prices in 2021 was also seen in other European countries, with the higher increases compared to 2020 recorded in the Scandinavian Area +475% (€ 62.87/MWh), followed by France +239% (€ 109.17/MWh), Spain +230% (€ 111.93 /MWh) and finally Germany +218% (€ 96.85/MWh).
France deserves a special mention, as during the last quarter it faced reduced nuclear availability because of ordinary and extraordinary shutdowns at several power plants just as winter demand was increasing. This has caused a further surge in domestic energy prices, with strong repercussions on prices in neighbouring countries such as Italy, usually a net importer from France, and on the price of gas, which is an alternative source to nuclear power in electricity generation.
MGP: Prezzi di Vendita2
National demand for natural gas in 2021 stood at 73,486 Msmc (Snam Rete Gas data), representing an increase of +7.5% over the same period in 2020. Most demand came from the residential sector (33,599 Msmc, +8.4%), with contributions from the thermoelectric sector (25,903 Msmc, +6.9%) and the industrial sector (13,984 Msmc, +6.3%), due to weather factors and the post-pandemic economic recovery.
The increase in demand was mostly covered by imports from gas pipelines (61,782 Msmc, +16%) against the drop in national production (3,121 Msmc, -18.7%) and especially the LNG loads (9,762 Msmc, -22.4%), attracted mainly from the Asian market due to the higher premium compared to the European reference prices.
In the course of 2021, inventory supplies fell by -2.3% (7,167 Msmc), while injection supplies fell by a good -7.5% compared to the previous year. After a winter that saw massive use of inventory, the colder-than-normal temperatures and already rising gas prices in the spring of 2021 led to a delay in injections that was not recovered in the summer, with the result that inventories reached new record lows both at the beginning of the 2021/2022 thermal year (October 2021) and at the end of 2021.