The recently adopted Italian National Energy Strategy (2017) sets out a plan for the complete phase-out of coal production by 2025, which today still accounts for more than 15% of the electricity generated in Italy. Given the pace of electrification of the energy sector and the expected increase in electric vehicles, the phase-out of an essential baseload technology might have adverse effect on the electric system, unless effective countermeasures are adopted and implemented. The aim of our analysis is to model the long-term evolution of the Italian generation capacity in order to carry out a CBA for the adoption of different technologies and different policy targets. Our results show that CCS technologies represent a viable option in an optimized generation expansion plan, irrespective of their high investment costs. The need for a rotating and predictable back-up technology outweighs its very high initial investment costs.

This seminar has been jointly organized by FEEM and IEFE, Bocconi University.