This document provides an executive summary of a report on renewable energies. It discusses the current state of renewable energy production worldwide, with many countries now installing more renewable than conventional energy sources. It also outlines targets for European Union countries to increase renewable energy production to 20% of final energy consumption by 2020 based on a 2009 directive. Specifically for Italy, the targets are to reach 17% of final energy from renewables and 10% of transport energy from biofuels. The summary examines renewable energy production and potentials in Italy and the Lombardy region to identify opportunities to increase adoption and meet targets.

1. Renewable Energies: State of the Art
Technological Solutions, Environmental Impact,
Legislative Framework and Future Development
Executive Summary

2. Renewable Energies: State of the Art – Executive Summary
This booklet offers a summary of the themes that are dealt with in the book Le
energie da fonti rinnovabili: lo stato dell'arte published in November 2011 and
presented in Palazzo Marini in Rome (the Italian lower house of parliament).
The idea of extracting a brief summary from the longer document arose out of a
desire to make available to a wider public an insight into the extensive and detailed
investigation that the Milan-based Foundation EnergyLab has been carrying out in
relation to the theme of renewable energies in Italy. The work is the product of the
combined efforts of a group of experts that gravitate around the Laboratorio Energie
Rinnovabili (Renewable Energies Laboratory), a project conceived of, developed and
promoted by Foundation EnergyLab. The contents of the booklet fully express the
multi-disciplinary approach characteristic of the work of the laboratory. The research
in question lasted for over a year and the final result is the fruit of a highly articulated
and carefully orchestrated effort that engaged a range of figures from various areas of
the academic, government and business worlds. In particular, the protagonists
included professors from Milan’s five universities and various research centres –
members of the foundation – as well as a range of people from the government and
business world.
Editor
Silvana Stefani Università degli Studi di Milano–Bicocca
Authors
Maurizio Acciarri Università degli Studi di Milano-Bicocca
Laura Ammannati Università degli Studi di Milano
Antonio Ballarin Denti Università Cattolica del Sacro Cuore
Paola Bombarda Politecnico di Milano
Allegra Canepa Università degli Studi di Milano
Aurora Caridi Ricerca sul Sistema Energetico–RSE SpA
Claudio Casale Ricerca sul Sistema Energetico – RSE SpA
Andrea Cerroni Università degli Studi di Milano-Bicocca
Maria Chiesa Università Cattolica del Sacro Cuore
Niccolò Cusumano IEFE – Università Commerciale L. Bocconi
Daniele Felletti Università degli Studi di Milano-Bicocca
Nicola Fergnani Politecnico di Milano
Marzio Galeotti Università degli Studi di Milano
Ettore Lembo Ricerca sul Sistema Energetico – RSE SpA
Arturo Lorenzoni IEFE – Università Commerciale L. Bocconi
Ennio Macchi Politecnico di Milano
Giampaolo Manzolini Politecnico di Milano
Paolo Silva Politecnico di Milano
Federico Viganò Politecnico di Milano
4

3. Renewable Energies: State of the Art – Executive Summary
The Scientific Members
The EnergyLab Foundation was founded Università Commerciale “L. Bocconi”
in Milan in 2007 with the goal of creating Università degli Studi di Milano Bicocca
a network of actors in the energy field Università Cattolica del Sacro Cuore
including universities, the business world Politecnico di Milano
and regional and local government. It is a Università degli Studi di Milano
non-profit organization whose members RSE – Ricerca sul Sistema Energetico
include Milan’s 5 major universities. The
foundation promotes research and
innovation in all areas of the energy
sector, operating by way of 6 laboratories
focusing on different themes:
Renewable Energies, Smart Grids,
Nuclear Security, Electric Mobility,
Energy Efficiency and Access to
Energy in Developing Countries.
The foundation’s legal status as a
participatory foundation makes it possible
for it to undertake non-profit activities,
furnishing support to its members and
present and future partners.
To Contact Us:
The EnergyLab Foundation
Piazza Trento, 13
20135 Milan (Italy)
Phone +39 02 7720.5265
Fax +39 02 7720.5060
info@energylabfoundation.org
www.energylabfoundation.org
5

4. Renewable Energies: State of the Art – Executive Summary
Executive Summary
At present climate change, environmental pollution and supply uncertainty are some of
the main problems to be solved. Search for possible solutions is difficult and needs big
investments and deep transformations in infrastructures for energy generation.
Nevertheless, a solution in the direction of a large scale conversion towards clean,
affordable and renewable energy sources (RES) must be found. In this environmental
framework, the world is progressively moving towards new technologies for energy
production: in 2008 electricity produced by renewables was about 18% with respect to
global electricity production (Fig. 1); in 2009, for the second consecutive year, United
States and Europe installed more renewable plants than conventional ones (based on
fossil fuels like carbon, oil and natural gas). In Europe about 60% of the new installed
capacity is renewable and more than 50% is located in the United States. Some scenarios
foresee that from 2012 the rest of the world will follow the same trends and new
renewable plants will overwhelm the conventional ones in capacity installed (REN21,
2010). Despite the crisis of other economic sectors, just in 2009 renewable plants capacity
extraordinarily increased (Fig. 2), in particular, PV (+53%), wind (+32%) and solar
thermal (+41%). Recent studies even foresee energy generation from renewable energy
4

5. Renewable Energies: State of the Art – Executive Summary
sources by 100% (De Lucchi and Jacobson, 2011; Jacobson and De Lucchi, 2011).
Security of supply and external dependence are some other critical issues. In 2007 China
imported oil by 47% while the United States and Europe by 94%.
Fig. 1 Electricity production from renewables in the world (year 2008): 3782TWh (Total production 20260
TWh). Source: IEA
end-2004 to 2009 Five Year Period
2009 only
120%
102%
100%
80%
60%
60% 53% 51%
44% 41%
40% 32%
27%
19% 21% 20%
20% 10% 12%
9%
4% 4%
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Fig. 2 – Worldwide average increase of renewable energy sources capacity from 2004 to 2009
Source: REN21
5

6. Renewable Energies: State of the Art – Executive Summary
Worldwide, in 2009 Italy has gained the fourth position for new investments and the
second position after Germany in the PV grid-connected sector (Tab.1). At the end of
2009 Italy got a fifth position for installed capacity for both geothermal and PV energy
(Tab. 1 and Fig. 3) and the sixth position for wind energy (Fig. 4).
Existing capacity as of end-2009
Renewables power capacity China United Germany Spain India
(including only small hydro) States
Renewables power capacity China United Canada Brazil Japan
(including all hydro) States
Wind power United China Germany Spain India
States
Biomass power United Brazil Germany China Sweden
States
Geothermal power United Philippines Indonesia Mexico Italy
States
Solar PV (grid-connected) Germany Spain Japan United Italy
States
Solar hot water heat China Turkey Germany Japan Greece
TOP FIVE COUNTRIES #1 #2 #3 #4 #5
Annual amounts for 2009
New capacity investment Germany China United Italy Spain
States
Wind power added China United Spain Germany India
States
Solar PV added (grid- Germany Italy Japan United Czech
connected) States Republic
Solar hot water/heat added China Germany Turkey Brazil India
Ethanol production United Brazil China Canada France
States
Biodiesel production France/Germany United Brazil Argentina
States
Tab.1 Renewable energy sources. The first 5 Countries (2009)
6

7. Renewable Energies: State of the Art – Executive Summary
Other EU Other
7% 4%
South Korea
2%
Italy
5%
United States Germany
6% 47%
Japan
13%
Global Total = 21 GW
Spain
16%
Fig. 3. PV installed capacity in 2009– The first Countries
Source: REN21
Existing in 2009 Added in 2009
40
10
35
30 13,8 1,9
25
Gigawatts
2,5
20
15 1,3
10
1,1 1,1 1,1 0,6 0,3
5
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Fig. 4 - Wind installed capacity in 2009- The first 6 Countries
Source: REN21
An incentive policy is central to launch new technologies. So far this system has been
adopted in more than 100 countries (Fig.5) RES represent an economic area with
enormous potentials, able to attract huge public and private capitals for financing energy
plants of different capacity, from roof PV panels till concentration solar plants.
7

8. Renewable Energies: State of the Art – Executive Summary
Fig. 5 Incentives in 2009 – EU27
Source: ECOFYS, 2010
For the credit area RES are a unique opportunity, taking advantages and contributing to
the growth and showing at the same time a high environmental sensibility. Banks and
financial Institutions should therefore develop internal high qualified skills for projects
evaluation. Actually, uncertainty in the stability of public incentives systems and the
intrinsic risk due to technological innovation assigns a higher risk to renewable
investments than to other investment fields. Furthermore, RES are a challenging research
area, from technological, economic, financial, environmental and sociological points of
view.
On the 12th of December 2008 the Directive Climate and Energy 20-20-20 had been
approved by the European Council. The agreement stated, for EU Countries, the reduction
of greenhouse gases emission by 20% and an increase in energy efficiency and renewable
energy production by 20% by 2020. The Directive 2009/28/CE had stated for Italy the
compulsory target of 17% of final energy consumptions by RES and that consumptions
due to transports would be covered by renewable energy sources by 10%.
Such a target will be reached through the reduction of final energy consumptions and the
increase in energy production from renewable energy sources in the three different areas
dealt with by the Directive: electricity production, heat production and the transport
sector. At the end of July 2010 Italy, as stated by the Directive 2009/28, had sent the
National Action Plan on renewables (National Action Plan) to the European Commission: it
showed the national objectives and trends till 2020 on the one hand and the measures
and actions to be enhanced or adopted in order to fulfill the objectives on the other hand.
The EU 27 situation in 2005 with regard to the 2020 target is represented in Fig. 6.
8

9. Renewable Energies: State of the Art – Executive Summary
Sweden
Latvia
Finland
Austria
Portugal
Denmark
Estonia
Slovenia
Romania
France
Lithuania
Spain Bas eline (actual) 2005 Level
Germany Target
Greece
Italy Target by 2020
Bulgaria
Ireland
Poland
UK
Netherlands
Slovak
Belgium
Czech
Cyprus
Hungary
Luxembourg
Malta
Total (EU-27)
0% 10% 20% 30% 40% 50%
Fig. 6 – European targets–Quota of final energy consumptions (2005 compared to 2020)
Source:REN21
The main targets of the national energy strategy concern supply uncertainty, the fostering
of innovative technological chains, environmental safety. The opportunities coming from
the fulfilment of such targets, in particular concerning energy renewable sources
development, will be considered by national industry using the resources and
competences already acquired in other manufacturing sectors. At a regional level big
efforts should be done spent in order to respect the European targets assigned to Italy.
The current mechanism under development at regional level is called burden sharing.
There is a shift from the traditional sectors planning to an integrated approach where the
Plan for a Sustainable Lombardy will be transversal and include all the regional
governance sectors.
While the burden sharing is still under definition, the Lombardy Region has adopted the
national targets:
• 20% reduction of greenhouse gases emission;
• Energy saving by 20% with respect to actual consumption ;
• Enhancement (final target:17%) of renewable energy contribution to final energy
consumption ;
• consumption in the transport sector covered by biofuels by 10%.
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10. Renewable Energies: State of the Art – Executive Summary
The Lombardy Region, with an electricity consumption of 24 Mtep in 2007, covers 20% of
national energy consumption.
The GSE Report (2009) underlines a renewable energy production by 20,4% for the
Lombardy Region with respect to national level , mostly associated to hydroelectric
energy.
Splitting the overall data with respect to each source, it emerges that, with regard to the
complete absence of wind plants installed, the Lombardy Region shows significative
evidence at national level for all the other sources: hydro (25%), solar (10,5%),
biodegradable wastes (56,9%), biogas (17,1%), biomasses and bioliquids (7,4%).
It becomes then essential to plan specific policies in order to define the short to medium
period technologies based on renewable energy sources with a major diffusion potential in
the Lombardy territory, along with non secondary evaluations concerning the potential
impacts on the local industrial chains involved and on the whole system in general.
In this framework, Energy Lab Foundation adopted a “low carbon” energy policy for the
Lombardy Region.
In particular, thanks to its Renewable Energies Laboratory, Energy Lab Foundation
developed a Report on the future-oriented diffusion of Renewable Energies in Lombardy
by 2020, analysing a plurality of aspects, in order to define the real development
opportunities for the Lombardy Region. This Executive Summary synthetically describes
the topics developed in the Report.
All the studied technologies (hydro, solar, geothermal, biomasses, biogas) could find a real
application in the Lombardy Region and/or foster the development of Lombardy industries.
Therefore wind technology has been included too.
A multidisciplinary analysis deals with technological, economical, legal and environmental
aspects and even considers local and public acceptance, the impact on the electric system,
the industrial chain and the state of the art of research in the Lombardy Region.
The Report objectives are manifold. The Report addresses different actors in the RES
development process: private investors and finance (EAC, Incentives), the regulator
(EROEI indicator for sustainability, CO2 abatement costs by 2020), the local administrator
(environmental section, acceptance), the producer (technologies and costs). The legal
section is transversal since it is a part of general interest.
10

11. Renewable Energies: State of the Art – Executive Summary
RES development constraints, like acceptance and regulation risks, are also underlined in
the Report.
The different sections developed in the Report are the following:
The technological section (Chapter 1) , developed by the Politecnico di Milano (POLIMI),
describes, for each specific technology, its costs, its potential development, the
technological evolution and prospects for end users. A table summarises the results at the
end of the Chapter.
In the legal section (Chapter 2), developed by the Università di Milano (UNIMI), the
regulative framework (till May 2011) concerning the authorisation processes for the
installation and operation of energy plants is reported, underlining the importance of fast
and simplified procedures for plant realisation.
A low carbon Region perspective must take into consideration environmental aspects,
more and more relevant and with economical impacts, given the European targets.
The environmental section (Chapter 3), developed by the Università Cattolica del Sacro
Cuore (UNICATT) and UNIMI, analyses some relevant aspects concerning the CO2
abatement costs for the different technologies and their environmental impacts. The
results show high costs for some technologies but a good potential for a sustainable
development due to others. The analysis takes into account different economical
scenarios.
The economical section (Chapter 4), developed by the Università Bocconi di Milano
(UNIBOCCONI), analyses the energy production costs for each technology, considering all
the different expense items and operational modes of renewable energy production plants.
The analysis takes into account different economical scenarios. Another economical aspect
deals with the analysis of incentives system.
The section concerning industrial and research state of the art (Chapter 5), evaluates the
state of the art of the renewable energies industrial chain (developed by UNIBOCCONI)
and the local state of the art of research in the RES field, developed by Energy Lab
Foundation and elaborated by the Università di Milano Bicocca (UNIMIB).
Renewable energies implementation is not only a means to reach the European targets
but mainly an opportunity for local development. Social acceptance is studied in the
Sociological Section (Chapter 6), developed by UNIMIB and RSE S.p.A. Different critical
11

12. Renewable Energies: State of the Art – Executive Summary
aspects are underlined, from the approval level till the project realisation level on a local
scale.
Furthermore, RES integration in the electrical system creates other problems to the grid
due to the intermittency of renewable energy production and the obstacles generated by
connection delays.
The section Non programmable Renewable Energy impact on the electrical system
(Chapter 7) , developed by RSE S.p.A., focuses on non programmable renewable energy
plants underlining important differences even among plants characterised by variable and
intermittent sources.
Finally, conversion tables and synthesis tables for each technology are reported.
The technologies
The most interesting technologies that make use of renewable energy sources, upon
which there are a lot of expectations in a framework of sustainable development at a
national and international level are described. For each energy technology both
theoretical and operational principles are reported, along with different plant examples
and their potential applications.
In particular, the following renewable energy sources are discussed:
• biomasses (for electricity and thermal production, even in the cogenerative mode, and
for biofuels production);
• geothermal energy (from electricity production till district heating and heat pumps);
• hydroelectric energy (mainly focusing on the real small scale applications in Europe);
• solar energy (both electricity from PV or concentration systems and thermal energy
production)
• eolic energy (on shore, off shore and minieolic)
The section ends with a synthesis table with economical data (Table 2) used as data
inputs for other evaluations developed in the following chapters.
12

13. Renewable Energies: State of the Art – Executive Summary
Tab. 2 - Economical data
Notes:
• O&M costs by POLIMI refer to the energy produced (€/MWh). Operational hours
equivalent have been derived at a national level from TERNA source, whenever
available, on the basis of installed capacity and energy produced data. Concerning
energy produced, the reference year is 2009 (most recent data available) while an
average value between 2008 and 2009 has been used for installed capacity (referring
to 2009 installed capacity, some plants that have just worked for a few days have been
included thus influencing the calculated equivalent hours).
• Concerning off shore wind plants, since national data are not available, the
international reference (belonging to North European Countries) has been adopted;
• Concerning PV, the calculated hours equivalent represent an average national value.
Considering plants located in Southern Italy, a real average value could be 1500 while
in Northern Italy 1000.
• With reference to concentrating solar plants (CSP), a 7 hour equivalent storage has
been considered and a multiple solar value (ratio between the thermal power
13

14. Renewable Energies: State of the Art – Executive Summary
generated by the solar field and the one sent to the power block in order to be
converted into electricity) of 2.
• Concerning geothermal and solar plants, being the applications manifold, more detailed
evaluations for the different energy technologies are reported in the specific
paragraphs.
The legal aspects
During the last years, the European institutions have defined a transition path towards a
high energy efficiency economy characterised by low CO2 emissions. According to these
goals the diversification of the energy sources and, especially, the increase of renewable
sources in the energy production will be playing a relevant role.
Specifically, with the Directive 2009/28/CE the CO2 emission cut as well as the increase in
energy efficiency targets (both by 20%) have become compulsory. Italy has adopted this
Directive with the Legislative Decree 2011/28 that redefines different aspects concerning
the authorisation procedure aimed at building and operating power plants.
So far the location and construction of power plants for renewable energy production has
represented a controversial issue. As a matter of fact, on the base of the allocation of
competences stemming from the Italian Constitutional Reform (2001), the Regions are
entitled with administrative and legislative competences that make it possible to
differentiate their policies and, sometimes, to influence the development of renewable
energy production.
It would be mentioned, as an example, the Moratorium bills concerning the authorisation
procedures approved by Regions such as Puglia, Sardegna and Molise and successively
ruled unconstitutional by the Constitutional Court.
Therefore specific guidelines have been enacted (10th September 2010) aimed at defining
a common procedure (the “single procedure”) and the minimal conditions required for the
release of the single permission, including the assessment of the harmonization conditions
of the new plants with the surrounding landscape.
The most recent Legislative Decree deals with these aspects. It still foresees the “single
authorisation procedure” for the plant construction (in addition to the “enabling simplified
procedure” and the notice concerning “free building activities”).
14

15. Renewable Energies: State of the Art – Executive Summary
However it provides modifications concerning both the procedure timing and the optional
request of an Environmental Risk Assessment (ERA): 180 days including the procedure
which leaves out the ERA and 90 days after the time due for the ERA, when requested.
Furthermore, the regions (and under specific conditions the provinces when delegated)
are entitled to provide the
authorisation concerning the
connection between power
plants and the national grid by
a different sort of single
procedure. This procedure
must be coordinated, i.e.
carried out at the same time,
with the related power plant
authorisation procedure.
Environmental impact
Energy production from renewable sources addresses to a sustainable development
framework; however, a renewable energy source does not imply the absence of
environmental impacts.
This Report compares different energy technologies describing, from a qualitative point of
view, their potential environmental impact. Moreover, interesting quantitative indicators
are considered, i.e. the avoided CO2 emissions during plant operation and their energy
efficiency along their estimated lifetime.
Hydroelectric plants that require human intervention, such as building dams, artificial
banks, but also the regulation and reduction of flow, might alter energy exchanges
among the different watercourse sections. That is the reason why the concept of minimum
vital flow for watercourses has been introduced. Other possible impacts are linked to the
hydroelectric plant structure, due to the realisation and operation of its different
components. As other civil structures, different land and landscape use as well as tourism
and noise effects have to be considered.
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16. Renewable Energies: State of the Art – Executive Summary
In general, environmental impacts associated to large hydroelectric plants can be
proportionally referred to small plants as well. PV plants do not generate chemical or
acoustic pollution. However, during production processes the environmental impact is
similar to the one belonging to a chemical plant since in the production process toxic or
explosive substances are used and need the presence of security systems and specific
instruments in order to protect the health of both workers and the production site.
Furthermore, in building and installing the system components, the high energy quantity
needed comes from fossil fuels thus determining a negative environmental impact before
entering into operation.
Land occupation is another important critical aspect for photovoltaic energy systems.
Even for thermal solar panels, that convert solar energy into thermal energy, the main
direct environmental impacts derive from the system’s components production and
transport while the main indirect impacts are linked to raw materials and electricity use.
As solar panels, this technology has visual impact problems that can be reduced choosing
forced circulation plants located inside residential houses.
On the contrary, CSP do not lead to relevant environmental problems since the toxic
thermal fluids used in the past have been substituted by the molten salts technology, a
mixture of sodium and potassium nitrates largely used in agriculture as fertilisers: they are
easily disposed of, non-toxic and non-flammable and they solidify very fast in case of
accidental leaks. Nonetheless, the high soil occupation due to these plants, as well as
orographic, geological and landscape constraints limit their technological potential.
Among all the technologies considered, undoubtedly wind energy is characterised by the
least environmental impacts. Actually, wind plant operation does not imply toxic
substances use nor air and water environmental pollution generation.
Public opposition is the first obstacle for wind plant diffusion if compared to their visual
and acoustic impacts, mainly when they are installed in cultural heritage or protected
areas.
As the other renewable energy sources, a geothermal plant generates less CO2
atmospheric emissions with respect to a traditional power plant. Nonetheless, a negative
environmental impact is due to fluid uptake from the subsoil such as CO2, H2S, CH4 and
NH3, along with chemical elements uptake (mainly heavy metals) by geothermal sources.
16

17. Renewable Energies: State of the Art – Executive Summary
Concerning geothermal probes associated to heat pumps, the environmental impact
derives from the deep or superficial soil drilling. Furthermore, some researches have
demonstrated that when heat demand is not accompanied by a soil “regenerative” action,
the geothermal field is predestined to progressively reduce its potential.
Among the energy technologies that could interest the Lombardy Region, a major role
could be played by biomasses: in this Report we have especially considered agricultural
and forestry residues, along with energy crops with a low environmental impact belonging
to Short Rotation Forestry (SRF) cultivations.
In order to restrain the environmental impacts due to atmospheric emissions of toxic
compounds, biomass combustion must be oriented to small and high efficient plants that
use wooden material (preferably pellets) or to big centralised cogenerative plants for a
little community of end users (Tab.3).
Technology Fossil PM10 CH4 N2O COVNM NH3 SO2 NOX
CO2
Open fireplace - 71,1 9,03 - 0,51 2,68 100 0,81 0,35 2,68
Traditional stove - 650 4,03 - 2,12 2 20 0,81 - 0,03 2
Low emissions - 869 3,03 - 2,72 1,44 9,89 0,41 - 0,17 1,44
wood stove
Pellet stove (BAT) - 998 0,53 - 3,09 2,79 0,91 0,11 0,08 2,79
CHP plant - 962 0,0002 - 2,40 - 1,3 - 0,36 - 0,006 - 1,35 - 1,3
8 MW e
CHP plant - 814 0,096 - 2,207 0,0528 - 0,20 0,02 0,05 0,54
8 MW e - SRF
CHP plant - 896 0,003 - 1,69 - 0,80 - 0,15 0,34 - 2,41 - 0,80
100 MW e
Tab. 3: Comparison between atmospheric emissions avoided or generated by biomass combustion with
respect to the use of fossil fuels (expressed in kg·t-1 of dry biomass)
Even biogas plant diffusion is limited by factors that negatively impact on the
environment. The anaerobic digestion market is actually strongly influenced by limitations
in spreading soils with nitrogen-based compounds.
The last energy technology considered is represented by second generation biofuels,
among which bioethanol and biodiesel in particular, since agricultural and forestry residues
used for biofuels production leads to high greenhouse gases emission reduction with
respect to the use of fossil fuels along an LCA analysis; nonetheless, atmospheric
particulate and polycyclic aromatic hydrocarbons (PAHs) emissions reduction strongly
depend on both biodiesel percentage and engine type.
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18. Renewable Energies: State of the Art – Executive Summary
CO2 avoided emissions can be used to select the best technologies for Lombardy from
both environmental and energy production points of view.
Besides the environmental analysis mainly based on avoided emissions the EROEI (Energy
Return On Energy Investment) indicator has been considered in order to evaluate the
“energy use efficiency” due to an investment in an energy production plant based on RES
along its lifetime. The EROEI indicator is calculated as the ratio of the net energy returned
by the plant during operation on the overall energy consumption during all the plant
lifetime. The break even point for a sustainable energy technology is then given by
EROEI=1. Different papers at international level show a range of EROEI values calculated
for different energy technologies, depending on different methodological approaches and
input datasets (Fig. 7). The competition between RES and traditional technologies based
on fossil fuels is evident, considering that high “energy efficiency ratios” correspond to
plants with higher EROEI values.
Fig. 7: Range of EROEI values associated to different energy technologies
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19. Renewable Energies: State of the Art – Executive Summary
Renewable energy contribution to the regional targets
Since a “burden sharing” concerning the amount of renewable energy to be produced by
2020 among the Italian Regions has not been defined yet, the Lombardy Region has fixed
the target of 17% of its final energy consumption using RES (including a minimum
contribution of 10% of biofuels for the transport sector), then imposing to the Region the
same national target.
The fulfilment of the defined target will then be possible with an increase of the actual
renewable energy plants capacity and/or with a reduction of the regional energy final
consumptions.
Actually, the increase of the energy efficiency of actual and future energy production
plants will imply a reduction of final energy consumptions: therefore, the regional target
must even take into account this last factor in the quantification of the energy produced
by renewable energy sources in the Lombardy Region by 2020.
From the results contained in the Report it emerged that, with respect to the regional
target concerning the abatement of about 8000 ktCO2 beyond 2020, the renewable
sources contribution will cover a minimum percentage of 50%, in the hypothesis that 10%
is represented by the use of biofuels in the transport sector (see Fig.8 for the energy
produced by each technology).
Fig.
8: Scenario concerning renewable energy production in the Lombardy Region in 2020
19

20. Renewable Energies: State of the Art – Executive Summary
It’s interesting to calculate the CO2 avoided emissions (t/y) per MW installed, resulting
from the average equivalent hours of each plant considered in the study (Fig. 9). As can
be seen fro Fig. 9, mini and small hydroelectric plants, along with plants fuelled with
biomasses and biogas plants, play a major role in terms of CO2 abatement.
Fig. 9: CO2 avoided emissions by a 1 MW plant
CO2 abatement costs for the different energy technologies
From the CO2 abatement cost for each energy technology, the increase in costs depending
on the market interest rates considered (4%, 6% and 10%) appears evident (Fig. 10, 11
and 12). First of all, it’s interesting to note that the solar thermal technology is definitely
competitive since it is characterised by very low CO2 abatement costs even showing
negative values associated to lower WACC values (4% and 6%).
20

21. Renewable Energies: State of the Art – Executive Summary
On the contrary, technologies, such as PV, that have always been strongly fostered with
economical incentives in the Lombardy Region, show very high CO2 abatement costs.
Small wind energy technology, despite the absence of data concerning its potential by
2020 in the Lombardy Region, appears very penalised, figuring in the very last position in
a scale of technologies characterised by increasing CO2 abatement cost values.
Neglecting technologies with a null potential in the Lombardy Region (i.e. onshore and
offshore wind plants and concentrating solar plants), from the analysis of CO2 abatement
costs it emerges that the only production of electricity due to the combustion of
agricultural and forestry residues is not convenient. On the contrary, while solar thermal
plants, small and mini hydroelectric plants and low temperature geothermal plants play an
important role undoubtedly presenting an interesting development potential by 2020 in
the Lombardy Region.
Fig. 10: Minimum and maximum CO2 abatement costs for different RE technologies (Interest rate = 4%)
21

22. Renewable Energies: State of the Art – Executive Summary
Fig. 11: Minimum and maximum CO2 abatement costs for different RE technologies (Interest rate = 6%)
Fig. 12: Minimum and maximum CO2 abatement costs for different RE technologies (Interest rate = 10%)
22

23. Renewable Energies: State of the Art – Executive Summary
Economical evaluation and incentives
With reference to the economical evaluation, for each technology the Equivalent Annual
Cost (EAC or levelised cost), i.e. the net overall cost value for the energy producer for an
investment along the real lifetime of a specific energy production plant, has been
calculated (€/MWh).
An average lifetime of 15 years has been considered, apart from considering a possible
residual time for specific cases like hydroelectric plants. As costs data the same reported
in the technological session by POLIMI have been used (Tab.2).
Three economical scenarios associated to different interest rates values (4%, 6%, 10%),
each one split in low cost and high cost sub scenarios, have been considered.
Results are summarised in Fig. 13: the minimum values of the bars represent the EAC
calculated for the low cost sub scenario at 4%, while the maximum values represent the
EAC calculated at 10% for the high cost sub scenario.
600
500
400
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300
200
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Fig. 13: EAC ranges (€/MWh) calculated for different technologies and scenarios
In literature incentives for energy produced by RES is calculated depending on the extra
production cost with respect to conventional fossil fuels. Nevertheless, other barriers
(economical-financial, political, cultural and environmental) prevent RES diffusion, thereby
23

24. Renewable Energies: State of the Art – Executive Summary
increasing the risk profile. Therefore, the incentives, increasing the project revenue,
decrease the risk and give rise to a market signal for individuals and Institutions. There
are different kinds of incentives: in the Report only incentives linked to electric energy
production are considered. Actually, RES for thermal energy production have been scarcely
considered by the legislator although they present the biggest increase margins and
attention has been limited to taxation mechanisms (as the costs detraction by 55% for
some applications in the domestic sector).
At present, the incentive system is as follows:
• Green certificates;
• Feed in tariff for RES electricity except PV (“ Tariffa Omnicomprensiva”);
• Feed in tariff for PV systems (“Conto Energia”);
• CIP6 subsidy.
These financial mechanisms are funded through the A3 component of the national
electrical bill (representing 68% of the system charges) by the end user.
The high increase of capacity installed, with particular reference to PV installations that
have access to the “Conto Energia” incentive system, costed about 3,4 billion euros in
2010; forecasts for 2011, according to recent announcements of the President of the
Authority for Electricity and Gas (AEEG), indicate a cost of 5 billion euros.
Overall Unitary
% Total
GWh subsidy subsidy
subsidy
Type of subsidy (MLN€) (€/MWh)
CIP 6 6300 780 123,8 23,0%
Green certificates 17800 1580 88,8 46,5%
Tariffa omnicomprensiva 1220 212 173,8 6,2%
Conto Energia 1967 826 419,9 24,3%
27287 3398 806,3 100,0%
Tab. 4: Overall and unitary subsidies with respect to energy produced in 2009
Source: IEFE elaboration from AEEG data
The Lombardy Region is directly involved in RES promotion through the expense of 201,6
M€ that would generate 493,7 M€ of investments till 2013. The contributions are
essentially in capital account and are activated through call for proposals.
24

25. Renewable Energies: State of the Art – Executive Summary
Some of these economical burdens are going to increase with the increase of plant
capacity. Therefore, AEEG has invited the Government to “shift a significant part of the
burdens due to the RES incentive system from the energy bill to general taxation, in order
to guarantee progressive and proportional criteria for public costs funding”, apart from
revisiting the incentives criteria (mainly Green Certificates), considered too generous for a
decline of generation costs. In our opinion this is a dangerous choice: if, at present,
incentives are accepted since they are not politically influenced and are directly bought by
the consumer, the shift to general taxation would create uncertainties in the attended
cash flow, linked to funds availability of the financial administration. In order to calculate
the RES net impact on public accounts we can consider the revenues (in terms of VAT for
example) coming from new investments , along with the occupational impact.
The adoption of the Directive 2009/28/EC foresees a deep revision of the actual system
starting from January 2013. A lot of specific issues will be defined through Executive
Decrees to be emitted during the next months. It must be underlined that every
instrument presents its pros and cons that must be considered with respect to both the
fixed targets and the Reference Institutional context. Therefore, the research of the
effectiveness and efficiency of the incentives system must proceed with a credible and
realistic promotional diffusion policy.
State of the art of research and industries operating in the RES sector
At present, databases that exhaustively contain information on industries operating in the
renewable energy chain at a regional level are not available, mainly for cross-membership
of industries with existing merceological categories .
It is then extremely difficult to extract and map the value chain of RES area where product
and service are so strictly related.
Furthermore, this area is quite young and constantly changing and the frequent
diversification of industries belonging to similar areas are not easily captured by statistical
sources.
Mapped industries are 240, representing 0,05% of the overall regional industries, that
were 499.005 in 2008 (Istituto Tagliacarne, 2010). Data are referred to 2010.
Turnover data are general; at this level it is not possible to define the turnover due to
activities just related to renewables.
25

26. Renewable Energies: State of the Art – Executive Summary
The data available for number of employees and for the turnover data, are given for the
whole company so is not possible to define the exact number of employees working on
activities in RES field for industries with more product lines. The same can be stated for
industries located in the Lombardy Region but operating at a national (and/or
international) level.
In order to reduce the possible imbalance generated by the mapping procedure, the
biggest industries with a limited local territorial occupation and with scarce data
concerning their business dimension in RES were excluded. This choice had excluded well
known energy producers on a national scale (i.e. General Electric, Siemens, ABB).
From the analysis (Tab. 5) it emerged that the total gross turnover of industries with
available data, about 91% of the sample, amounts to 5,6 billion euros, representing
1,76% of the total added value generated in Lombardy in 2008, with single industrial
contributions well beyond the regional average.
If we consider the net profit as of 2009, 70% of industries produced revenues.
Considering the types of activities, the most relevant for the income are planning and
installation (3,9 billion euros) followed by manufacturing (2,4 billion euros) and
professional (1,8 billion euros) activities. With reference to energy sources, solar energy is
the leader producing the largest revenues (3,4 billion euros).
Activities Biogas Biomasses Wind Geothermal Hydro Multi Solar Total
sources
Financial 25 19130 19155
Insurance
Manufacturing 49770 266966 59500 197926 536129 1268636 2378927
Professional 60436 763 2885 47706 76888 188678
Wholesale 44925 18 262418 1012060 1319421
Retail
Planning 12030 731 2050 135661 247921 398394
Installation
Production 15752 264189 8986 43330 931699 22888 1286845
Total 77552 637247 9774 61568 244141 1913614 2647524 5591420
Tab. 5: Turnover (expressed in k€) per source and activity
In the different EU Countries, especially in Germany, investments in research have
determined industrial development while Italian industries operating in this field have not
26

27. Renewable Energies: State of the Art – Executive Summary
reached a similar expansion yet mainly because of the incentives system strongly built on
capacity installed than on research.
Nevertheless, at a national level public investments in research in the energy field
increased more than in other traditionally strong sectors, like manufacturing, building and
service areas. Energy efficiency and saving are the mainly fostered sectors where there is
a major feedback in terms of patents. In the IRES Report (2010) Italy is ninth in terms of
patent applications in the energy sector mainly due to research on cogeneration and fuel
cells.
The development of renewable energy sources, if considered along all the value chain,
fosters different occupational opportunities at different levels in terms of ability,
competence, responsability and remuneration.
Lombardy Region is the one that fosters research most. Unfortunately, regional
disaggregated data concerning the energy sector or, more specifically, renewable energy
sources are not available.
Therefore, an analysis focused on the identification of the main actors operating at a
regional level in the energy sector has been carried out by Energy Lab Foundation in 2008
thanks to the project “MApping of Competences (MAC1)”, funded by Lombardy Region.
Results of this survey are available on the following website:
http://mappaturacompetenze.org where a quite detailed picture of the state of the art of
research in the five Universities of Milan is represented.
In 2010 the mapping procedure was opened to other Universities or Research Centres
operating in the Lombardy Region (MAC2). Since the beginning of 2011 results are
available and this work, still developed by Energy Lab Foundation will constitute a unique
and useful instrument for the quantification of the real consistency of research on RES in
Lombardy. Furthermore, it could be a big opportunity for industries interested in finding
competences in the energy sector useful for new products development. The most
interesting data on research consistency in the Lombardy Region can be summed up in
the following figures and tables.
Considering the 480 research areas linked to the energy sector 1379 human resources are
occupied (professors, researchers, technicians and temporary resources) among 75
University Departments and 19 Research Centres localised on the regional territory
(Tab.6). Along with this permanent personnel staff, there are a high number of people
27

28. Renewable Energies: State of the Art – Executive Summary
belonging to non permanent personnel staff (fellow researchers and staff with temporary
contracts).
Researchers 507
Professors 807
Technicians 23
Other 42
Total 1379
Tab. 6 Human resources working in the energy sector in Lombardy
A look at the research institutions involved, divided with respect to their subject area,
underlines the strong presence of scientific and technological subjects (Tab.7).
Economical 39
Financial 15
Juridical 5
Medical – Sanitary 3
Scientific - technological 66
Sociologic 15
Humanistic 6
Tab. 7 Research institutions involved with respect to their reference area
The Energy Lab Foundation analysis emphasizes that, at a regional level, research in the
energy sector is strongly directed towards RES and other interrelated technologies.
If we analyse the single specific research lines under macro areas of interest, among 1031
research lines registered, 230 (22,3%) concern “renewable energy sources and
technologies” (Tab.8).
It must be underlined that each research area could be described by a maximum number
of 3 keywords: therefore, the overall number of research lines reported under this issue
could be higher than the actual number of active research lines (480).
If we insert the more generic word “renewables” in the research by keywords the number
of research lines becomes 293 instead of 110 resulting from the insertion of “non
renewables”.
28

29. Renewable Energies: State of the Art – Executive Summary
Obviously, this result is even due to the fact that manifold aspects are associated to the
term “renewables” , linked to 3 main streams: technologies, sources and vectors, market
and environment.
Research lines for each macro area Total 1031
Environment, health and climate change 85 8,2%
Building activities and other uses 76 7,4%
Energy: social and cultural aspects 36 3,5%
Non renewable energy sources and technologies 109 10,6%
Renewable energy sources and technologies 230 22,3%
Markets and Finance 22 2,1%
Policies and planning 80 7,8%
Regulation 49 4,8%
Energy efficiency and saving 169 16,4%
Systems, grids and infrastructures 125 12,1%
Transports and mobility 50 4,8%
Note: Each research line could belong to a maximum of 3 areas of interest
Tab. 8 Research lines for each macro area of interest resulting from MAC1 and MAC2 databases in the
Universities and Research Centres located in the Lombardy Region.
The mapping procedure evidences important local academic competences, from
managerial aspects till the evaluation of impacts of renewables on the market and new
investment opportunities.
The multidisciplinary competences offered by the Universities located in the Lombardy
Region represent a great opportunity for local small to medium enterprises (SMEs) that
want to transfer new technologies from the labs to new production and/or investment
lines in a continuously expanding market.
Universities and Research Centres located on the regional territory offer all the
competences for a highly qualified formation of new professional figures requested by the
“green economy”.
Social impact
Despite the fact that an economic development based on a low emissions scenario must
take into consideration renewable energy sources, social consensus is another essential
factor for its success. The importance of public acceptance and, even before, public
perception of renewable energy sources are well known. Nevertheless, this aspect has
never been considered all over the world since the eighties when the first applications
29

30. Renewable Energies: State of the Art – Executive Summary
began. A public acceptance extremely in favour of renewable energy sources had always
wrongly lead to the opinion that consensus was not a problem. The problem started
passing from a general to a local point of view.
Some fundamental aspects concerning distributional equity (“How costs and benefits are
subdivided at local level?”), procedural equity (“How much local groups and citizens are
involved in the decisional process?”), trust in local institutions and project financers are
linked to local consensus. If we also consider market acceptance (another important
aspect of public acceptance), small producers, apart from covering their needs, can
become suppliers of energy services to third parties, at least in under use or over
production periods.
The producer, a hybrid and still under developed figure, could have a major role in
communicational events, both for economic returns and for their active citizenship
function. In this case, we would even see the development of the prosumer, i.e. a hybrid
figure between the producer and the foreseen consumer.
A comparison between Italy and the rest of Europe (Eurobarometer, 2006, Fig.14 and 15)
is reported. Apart from oil consumption, the use of fossil fuels results similar. In Italy a
reduced acceptance of renewable energy sources can be seen, with particular reference to
biomasses, showing a difference of 5-6% from average EU data. Furthermore, the
percentage of no answers is higher in Italy than in the rest of Europe. A lack of
information and communication is therefore evident, mainly because technological
characteristics are not always exhaustively explained as well as their benefits in terms of
environmental and occupational impacts.
An Italian survey conducted in Padua confirms the need for information on renewable
energy sources at all levels.
30

31. Renewable Energies: State of the Art – Executive Summary
Fig. 14- Consensus (EU 25 average data) on different energy sources_DK = Don’t Know
Source: Eurobarometer, 2006
Fig. 15- Consensus Italy (Average national data) on different energy sources_DK = Don’t Know
Source: Eurobarometer, 2006
Impact of non programmable renewable energy sources on the electric system
The integration of RES in the electric system determines specific problems mainly when
we are dealing with intermittent and non programmable sources.
31

32. Renewable Energies: State of the Art – Executive Summary
These problems could all be ascribed to the often decentralised localisation of plants, on
the one hand, that have to be installed where the source is available, and, on the other
hand, to the intermittency of electric power generated.
Among non programmable RES we can cite, in particular, flowing water hydroelectric
plants (without accumulation systems or storage basins) , wind plants and concentrating
and PV solar plants.
Depending on plant capacity and, therefore, the voltage of the connecting grid, problems
could arise in the national transmission system or in the local distribution grids.
In the transmission grids, the diffusion of RES non programmable plants could lead to
additional costs in order to implement the grid with new lines and stations, thus avoiding
the formation of bottle necks that could need, under certain conditions, forced limitations
of RES production.
Fig. 16: Trend of additional costs [€/MWh] for grid reinforcement as a function of wind power penetration
into the electrical system (percentage of total energy production) under three cost assumptions representing
different European grids
(Source: GreenNet-Europe, series of three projects supported by the Framework
and IEE Programmes of the European Commission from 2003 to 2009t)
Furthermore, source variability and limited predictability could lead to an increase of
system costs to assure a balance of power generated and power absorbed by the end
users in order to guarantee the continuity of frequency and voltage inside the ranges that
characterise the electric service quality.
32

33. Renewable Energies: State of the Art – Executive Summary
Fig. 17: Extra balancing cost depending on Wind penetration
(Comparison of international studies, except Germany)
Source: GreenNet-Europe, series of three projects supported by the
Framework and IEE Programmes of the European Commission from 2003 to 2009t
In energy distribution grids particular problems arise linked to the fact that the installation
of distributed generation plants transform grids from passive to active thus needing new
development and management systems till the realisation of the so called “smart grids”.
With reference to the integration aspects , the Report focused on non programmable RES
plants, even showing great differences from one source to another due to their variability
and intermittency.
For example, it’s evident that watercourse variations for a flowing water hydroelectric
plant are very slow and follow the seasons in a quite foreseeable way even if they show
yearly differences.
Difficulties in energy balancing and generation dispatching into the system are then
limited. On the opposite side we have wind plants whose source, wind, presents very
strong variability and intermittency, even if there are some seasonal foreseeable trends
(Fig.16 and 17).
Furthermore, power generated by a wind plant is proportional to the cube of the wind
velocity and because of this sensible fluctuations of wind velocity are transformed in
strong variations of electric power delivered to the grid.
An intermediate position is occupied by solar plants, whose source is very variable, but in
a quite predictable way depending on seasons, days and hours.
33

34. Renewable Energies: State of the Art – Executive Summary
A non predictable component for these plants can be ascribed to meteorological events
(such as cloud formation) that influence solar plant production for just a few hours or
whole days.
The influence of this last component on
energy production is generally less
important for wind plants.
Big concentrating solar plants are often
characterised by a natural gas generator
that works as an auxiliary power unit or
a storage system of thermal energy that
can be used during night time or periods
with no solar insolation.
Concerning PV plants, the low capacity
that characterises most of the plants,
along with their disperse locations and
the presence of a storage system (batteries), should reduce consequences due to
production fluctuations.
Summing up all the specific characteristics of the different energy plants, in the Report the
aspects of integration of non programmable RES to the electric system refer to the
extreme case study, represented by wind plants, that should embody, if not all, most of
the aspects related to other non programmable energy sources.
References
• Accenture and Barclays (2011), Carbon Capital – Financing the low carbon economy
• Delucchi M.A., Jacobson M. Z. (2011), Providing all global energy with wind, water and
solar power, Part II: Reliability, system and transmission costs, and policies, Energy
Policy 39, 1170-1190
• ECOFYS (2010), www.ecofys.com
• Eurobarometer (2006), Public Opinion in the European Union, European Commission
34

35. Renewable Energies: State of the Art – Executive Summary
• GSE (2010), Le attività del Gestore dei servizi energetici, Rapporto 2009
• IRES (2010), Annual Report
• Istituto Tagliacarne (2010), Unioncamere, Atlante della Competitività delle Province e
delle Regioni
• Jacobson M. Z., Delucchi M.A. (2011), Providing all global energy with wind, water and
solar power, Part I: Technologies, energy resources, quantities and areas of
infrastructure, and materials, Energy Policy 39, 1154-1169
• Ossenbrink H., Renewable Energy: Photovoltaic, Solar, Electricity Biofuels, JRC
European Commission, http://ie.jrc.ec.europa.eu/
• REN21 2010, Renewables 2010 Global Status Report, Paris, REN21 Secretariat, United
Nations Environment Programme
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36. Renewable Energies: State of the Art – Executive Summary
36