Amid divisions, Italy delays decree aimed at boosting energy security

Rome: Italy has failed to approve a decree aimed at promoting the country’s energy security, two government officials said on Monday, signalling internal disagreements within the coalition.

Energy Minister Gilberto Pichetto Fratin had earlier said the cabinet was set to discuss the planned legislation at its meeting on Monday.

But the officials, asking not to be named, said the package was complex and required further investigation.

A contentious issue concerns plans to extend concessions held by companies managing hydroelectric plants in exchange for more investments, one of the sources said without providing further details.

Should it be adopted, the move would help utilities including Enel (ENEI.MI), A2A (A2.MI) and Edison to modernise their hydropower stations.

There is also debate on whether to go ahead with the extension for a maximum of 12 months of a special scheme that helps some households purchase electricity from their incumbent supplier. That regime is currently set to expire in January.

Another provision that had been envisaged in the package would likely trigger criticism from environmental lobbies, as it paves the way for boosting offshore drilling in the Adriatic sea, provided that the fields have potential gas reserves exceeding 500 million cubic metres.

A draft of the decree showed that the government planned to revive an existing programme run by state-controlled group GSE to buy domestically produced natural gas and sell it on to energy-intensive firms “at affordable prices”.

Rome has also been considering setting aside 420 million euros ($445 million) through 2026 to build in southern Italy a strategic hub for floating wind power.

To increase supplies of natural gas, the draft legislation stated that onshore LNG terminal projects represent “strategic interventions of public utility, non-deferrable and urgent”.

This 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.

Moreover, the draft envisaged 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.