Italy Regulator Asks Renewable Producers to Act Responsibly on Costs

By Liam Moloney

ROME--Italy's energy regulator Wednesday asked renewable producers to act responsibly as the incentives to promote the sector is costing billions of euros a year, despite the country's energy demand dropping to 1998 levels due to the recession.

The regulator estimates incentives to renewables will rise to 12.5 billion euros ($16.3 billion) in 2015 from around EUR11 billion last year. Incentives are paid by energy users via extra costs to their bills.

"To renewables [generating] sources we ask to act responsibly on the high costs to the system," Guido Bortoni, energy regulator, told lawmakers at the annual presentation to parliament.

The increase in costs and taxes to bills, which now represent around 33% of the total amount, is "concerning," said Mr. Bortoni.

Renewables generated 32.2% of Italy's electricity output in 2012, an increase of 10% on the year, while the thermoelectric sector covered the remaining 67.8%, a drop of 7.6% over the same period, said the watchdog.

The regulator also told lawmakers that there are no signs of an energy pick up.

Imports in 2012 continued to represent 90% of Italy's natural gas demand, flat on the year, said the regulator.

Italy's gas imports mainly come from Algeria and Russia, via OAO Gazprom (GAZP.RS).

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