Energy: ENEA analysis for 3rd quarter 2024, renewables up by 8%, energy demand by 2%, emissions decline slows down (-1%)

Renewable energy production continues to grow (+8%)^[1], final energy consumption is increasing (+2%) and there is a significant slowdown in the decline of CO₂ emissions (-1% compared to -7% recorded in the first half of the year). This is what emerges from ENEA Analysis of the Italian energy system for the third quarter of 2024, which also highlights a worsening of the ENEA energy transition index ISPRED (Index Security and Prices of Energy supply and Decarbonization), which reached a new low, mainly because the decarbonization targets for 2030 are currently farther away.

The recovery in energy consumption is driven by transportation (+2%) but also by the buildings sector, due to the strong use of air conditioners during last summer (+3.5%), while energy consumption in the industry continues to decrease (-2.5% compared to the third quarter of 2023). “The latter is the tenth consecutive quarterly decline, influenced by the crisis of the German economy and by energy prices remaining at historically high levels, and increasing again," explains Francesco Gracceva, the ENEA researcher who coordinates the analysis. “As for renewables – he adds – the 8% growth in the quarter is a slowdown compared to the +25% recorded in the first half of 2024.”

The decrease in CO₂ emissions is concentrated in the power sector, where in the first nine months of the year the share of generation from fossil fuels fell to 46%, a new historical low, six percentage points less than the previous low of 2023.

On the other hand, CO₂ emissions grew (+2%) in non-ETS sectors (tertiary, residential, transport, and non-energy-intensive industry), where the increase in transport more than offsets the decrease in industry and buildings.

The sharp slowdown in the decrease of emissions has had a negative impact on the composite ENEA ISPRED^[2] index. "The indicators relating to the decarbonization component of ISPRED reached new lows, because the current trajectory of emissions in the non-ETS sectors has never been so far from the 2030 targets," clarifies Gracceva.

In the next six years, emissions in these sectors should be reduced on average by at least 5% annually to meet the targets. And the growth of renewable sources also remains well weaker than the one depicted in the recent PNIEC.

In terms of primary energy sources, coal decline continued in the third quarter (-40%), while all other fossil sources have increased: oil +2.5%, driven by the growth in mobility, and gas +3%, due to increased use in electricity generation. In the Euro area the changes in primary energy have been different: coal -20%, gas -5%, oil unchanged, electricity production from renewable up by about 15%, nuclear +6%.

On the wholesale energy markets the price of gas has increased again in the third quarter (+7% for TTF^[3] compared to a year earlier), standing above €40/MWh since October. Despite the significant increases recorded between April and June (mainly in Spain and France) on European power markets prices remained well below year-ago levels, with the only exception being Italy, where the price was over 5% higher.

[1]   All percentages refer to comparisons between Q3 2024 and Q3 2023, unless otherwise indicated.

[2]  ] Indice Sicurezza energetica, PREzzi energia e competitività, Decarbonizzazione, i.e. Index energy Security, energy Prices and competitiveness, Decarbonization.

[3]  TTF is the virtual trading point of the Title Transfer Facility or the Netherlands Securities Transfer Fund, which is used as a reference gas market at European level.