Italy - Energy and power

Relying on foreign sources for over 90% of its energy needs, Italy is one of Europe's largest importers of oil. The country's heavy reliance on imports from sources such as Libya and Algeria has made energy security and diversification a priority. From 1970 to 1991, Italy's per capita consumption of energy rose by 70%. Petroleum production rose dramatically from 14,000 tons in 1937 to 1,506,760 tons in 1968, and to about 4,298,000 tons in 1994. In 2000 oil production stood at 145,000 barrels per day. Production falls far short of domestic needs; crude oil consumption in the same year totaled 1.9 million barrels per day. Under an energy plan adopted in October 1981, the government has sought to reduce oil's share of the nation's primary energy requirement from 67% in 1980 to 50% by 1990. This goal was reached (and surpassed) in 2000, when oil accounted for less than 50% of Italy's energy consumption for the first time in more than two decades.

Oil production was expected to rise with the development of oil reserves at Val d'Agri in the southern Appenines. Production from the oil fields began in 2000, but full capacity couldn't be reached until the completion of a pipeline to transport the oil to the refinery at Taranto, in 2001. The field was expected to be producing 100,000 barrels per day by 2004. Development of the neighboring Tempa Rossa field was slated to add another 44,000 barrels per day in 2003. Oil has been partly replaced by natural gas, whose consumption is expected to continue rising in the future. Natural gas production, which increased from 15 million cu m in 1937 to 15,273 million cu m in 1974, stood at 17,500 million cu m in 1999. Produced primarily in the Po River Valley, the gas is piped to the large cities of the north. The National Hydrocarbon Agency (Ente Nazionale Idrocarburi—ENI), a state agency, controls the production and distribution of natural gas and petroleum. Provatization of ENI took place between 1995 and 1998. As of 2002, the government's stake in the company was down to 35%, and ENI was the sixth-largest publicly traded oil company in the world.

The electric power industry, nationalized in 1962, underwent a restructuring when the government sold off 32% of Enel, the major power company, in November 1999 in Europe's largest initial public offering (IPO). In addition, three separate generating companies were formed for sale in the future. Italy's total installed electrical capacity was 68.5 million kW in 2001. By the late 1990s, hydroelectric power represented about a quarter of the country's capacity, a decline from the early 1960s, when it accounted for 60% of installed capacity. National electrical output in 2000 was 256 billion kWh. Conventional thermal plants produced 80%; hydroelectric, 17%; and other sources (non-nuclear), about 3%. Consumption of electricity in 2000 was 283.7 billion kWh. As of 1993, Italy's National Energy Plan called for an investment into the renewable energy sector (especially biomass, solar, and wind energy) of 4.5 trillion lira until the end of the decade.