Terna plans €16.6 billion investment in Italy's power grid to integrate renewable energy

Terna plans to invest €16.6 billion in the grid between 2024 and 2028. The investment aims to strengthen Italy’s energy security by increasing investment in the power grid to support more renewable energy, all without raising costs for consumers. The plan could help improve the country’s long-term competitiveness, ease grid congestion at major bottlenecks, and reduce the amount of renewable energy that is currently wasted due to curtailment. Terna will have to significantly increase its capital spending compared to previous years, while still protecting its investment-grade credit rating. The success of these investments will rely on ensuring stable funding through regulated cash flows, without putting unnecessary pressure on electricity tariffs or affecting energy affordability for customers. In 2024, 84% of Terna’s revenue came from regulated activities. Terna’s transmission charges could continue to remain close to their long-standing average of 4% of the total electricity bill until at least 2028. Most of Italy’s renewable energy generation is located in the south, while the majority of electricity demand remains in the industrial north. Italian regulators have multiple tools available to support grid modernization while limiting the impact on consumer bills, including reducing the link between electricity bills and fluctuating gas prices, strengthening carbon pricing, and implementing environmental tax reforms.