Italy: Renewables Policy as a Barrier to Energy Innovation

Abstract

Italy's limited natural energy reserves, high dependency on imports and enormous user costs provide an opportunity to innovate. Yet the 2008–2011 Italian government failed to uphold its legislation permitting construction of innovative nuclear reactors. As this government's popularity dwindled, subsidising low-risk renewable projects appeared more popular, especially for solar installations. European and Italian subsidies for Italian renewable energy encouraged the more widespread application of existing technologies, rather than innovation. During 2012, Italy's technocratic government has debated a new energy law, which will continue incentives for low-capacity, renewable and low-risk energy projects, although with reduced subsidies. The new law will not support serious technological innovation to boost energy production, reduce import dependency or defray high costs. Instead, this paper recommends expanding hydro-electric power, exploiting shale gas, constructing more large-scale solar installations, equipping coal-fired power plants with carbon capture and storage, and building at least four nuclear European Pressurised Reactors.