A load of hot air? There's no ducking the energy issue.

Italy's minister for Foreign Affairs, Gianfranco Fini (TIFOF™)*, was quick off the marks last week in writing to EU Commission President, Manuel Barroso, urging him to initiate discussions at the hightest levels to resolve the Russia-Ukranian gas stalemate (a deal was finally reached in the middle of last week).

The deal will have brought little consolation to Italy, which has had yet another short sharp shock in relation to its security of energy supply. Two years ago a tree fell down in Switzerland and Italy as a nation found itself without Electricity for several hours. Last Tuesday (2nd January) Italy registered a drop of up to 24% in pressure in its gas pipelines due to the Russian squeeze on the Ukrainians. It's hard to be sure of your energy supply when you import up to 85% of it from abroad.

One policy to ensure a steady energy supply has been to seek diverse suppliers, so for the 80 billion cubic metres of Gas imported annually Italy turns to both Russia and North Africa (Libya and Algeria). 36% of this is used in homes throughout the country for heating/cooking. Another 36% is used in the national grid system to produce up to 60% of Italy's electricity (source La Repubblica).

Rising gas/oil prices coupled with a particularly cold winter are driving up utilities bills for a public that is already feeling the pinch of a continuing economic crisis.

The economists will tell you that technological innovation is spurred on by conditions such as these, as investors start ploughing money into research and development for alternative energy sources - paradoxically relatively cheap oil prices over the years have meant that we are still dangerously dependent upon oil as it hits record prices. Well and good. Taking this monkey's current gas bill as a barometer, Italy is in particularly desperate need of some energy breakthrough.

Alberto Clò, one of Italy's "greatest experts on energy politics" gave an interesting interview, in La Repubblica, where he suggested various plans that need to be reconsidered if Italy is to avoid loss of energy supply. These included

Reversing privatisation:
"The fact is that privatisation can only be done in markets where there is an excess of production, otherwise it's a boomerang. In the gas sector, for example, the Gazprom-Ukraine crisis is precisly the example that shows that the market on its own can't give the right response, particularly when facing political disputes.

Environmental concerns:
"Practical countermeasures must be put in place to co-ordinate the gas reseves of various countires or the introduction of greater flexibility in the use of energy sources also temporarily suspending environmental protection regulations"

and of course Nuclear power:
"Yes [to investment in Nuclear Energy], but in the long term. It's impossible to expect immediate results from Nuclear".

Nuclear energy is contentious in Italy, where it is prohibited by law (after a referendum) despite the fact that the electricity imported from France is generated partly by nuclear reactors. Berlusconi re-opened the nuclear debate last year, pointing out that Italian firms are penalised by high energy costs (20-30% higher according to il Cavaliere) while at the same time living with the risk of environmental damage from neighbouring France's reactors. For once Berluska almost seems to have sense on his side.

It's a far from simple issue though. The debate rages as to how economic and safe Nuclear may be.

One thing that baffles this monkey,though, having attended the annual Pio Manzu energy conference and heard Jeremy Leggett, director of Solar Century and advisor on solar energy to Tony Blair's government, is why there hasn't been more emphasis on solar energy in this decidedly sunny country. Leggett talked through the experience of the somewhat shady Woking in Surrey where through a combination of solar and renewable energy and the implementation of energy efficiency measures, the local council have become world virtually self sufficient in terms of energy, without reliance on the National Grid.

We'll wait to see the manifestos for this year's election, but this monkey suspects that in relation to energy policy and concrete proposals the language will remain sadly cloudy.

*The intelligent face of fascism

Posted by 3Monkeys at

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Posted by: 3monkeys at January 13, 2006 03:22 PM

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