Italy to Approve Measures to Boost Energy Security as Gas Prices Rise

Giorgia Meloni / Credit: - CC-BY 3.0
Giorgia Meloni / Credit: - CC-BY 3.0

Italy will on Monday approve a decree setting aside 420 million euros ($445 million) through 2026 to build a strategic hub for floating wind power, a draft showed, while also cutting red tape for onshore liquefied natural gas (LNG) terminals.

Prime Minister Giorgia Meloni's government will meet at 1530 (1330 GMT) to discuss and approve "urgent measures to promote the country's energy security", officials from her office said.

The legislation, put forward by Italy's Energy Minister Gilberto Pichetto Fratin, comes in the wake of rising wholesale gas prices, as the conflict between Hamas and Israel keeps energy markets on edge.

Rome intends to decide within four months where exactly to build the new hub, which will be located in southern Italy to boost investments in some of the country's poorest areas.

Under the package, which is still subject to change, the government will try to revive an existing program run by the state-controlled group GSE to buy domestically produced natural gas and sell it on to energy-intensive firms "at affordable prices".

The government had drawn up measures to extend concessions held by companies running hydroelectric and geothermal plants in exchange for more investments, but the latest draft decree seen by Reuters ahead of the cabinet meeting limits that option only to the latter.

Meloni seems to have also dropped plans to extend from a minimum of six to a maximum of 12 months a special scheme that helps some households purchase electricity from their incumbent supplier, which is set to expire next January.

To increase supplies of natural gas, the decree states that onshore LNG terminal projects for which the relevant authorizations have already been issued represent "strategic interventions of public utility, non-deferrable and urgent".

That would allow the government to speed up work on two LNG terminals promoted by Enel ENEI.MI in Porto Empedocle and by Iren IREE.MI and Sorgenia in Gioia Tauro, both in southern Italy.

A measure that will likely trigger criticism from environmental lobbies paves the way for boosting offshore drilling in the Adriatic sea, provided that the fields have potential gas reserves exceeding 500 million cubic meters.

In addition, the decree takes the first steps to outline a framework for the development of carbon capture and storage facilities (CCS), which are deemed by experts as crucial for meeting emission reduction targets agreed with European Union authorities.

Energy group Eni ENI.MI and power grid operator Snam SRG.MI announced in September a project to set up a carbon capture hub offshore Ravenna.

($1 = 0.9439 euros)

 (Editing by Susan Fenton and Jan Harvey)

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