Market Overview
| Study Period | 2020 - 2030 |
|---|---|
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Volume (2025) | 148.76 gigawatt |
| Market Volume (2030) | 190.10 gigawatt |
| Growth Rate (2025 - 2030) | 5.03% CAGR |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
|
Italy Power Market Analysis by Mordor Intelligence
The Italy Power Market size in terms of installed base is expected to grow from 148.76 gigawatt in 2025 to 190.10 gigawatt by 2030, at a CAGR of 5.03% during the forecast period (2025-2030).
Rapid scaling of solar and onshore wind, accelerated permitting under Legislative Decree 199/2021, and battery-storage auctions that secured 9 GW of new capacity in 2024 are the primary growth engines. The coal phase-out scheduled for December 2025 removes 5.5 GW of dispatchable supply, intensifying the need for flexible assets that can balance intermittent resources. Strong public-sector funding, most notably the EUR 1.9 billion (USD 2.1 billion) REPowerEU grant for the 1,000 MW Tyrrhenian Link HVDC cable, eases south-to-north transmission bottlenecks. Utilities are expanding corporate power-purchase agreements (PPAs), while grid-code revisions mandating synthetic inertia raise the technical bar for new renewable projects, favoring well-capitalized developers.[1]Terna S.p.A., “Italian Capacity Statistics 2024,” TERNA.IT
Key Report Takeaways
- By power source, renewables commanded 70.4% of installed capacity in 2024 and are advancing at a 10.4% CAGR through 2030.
- By end user, utilities supplied 64.7% of demand in 2024 and are forecast to grow 6.6% each year to 2030.
Italy Power Market Trends and Insights
Drivers Impact Analysis
| Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Accelerated Permitting Reforms under Legislative Decree 199/2021 | +1.2% | National, with strongest effects in southern regions (Sicily, Apulia, Calabria) | Short term (≤ 2 years) |
| Grid-scale Battery Capacity Market Auctions (Terna) | +0.8% | National, concentrated in high-solar regions (Sicily, Apulia, Sardinia) | Medium term (2-4 years) |
| Coal Phase-out by 2025 Creating Capacity Gap | +0.9% | National, replacement capacity focused in northern industrial hubs | Short term (≤ 2 years) |
| REPowerEU-funded HVDC Projects (Tyrrhenian Link) | +0.6% | Southern Italy (Sicily, Campania), spillover to mainland grid | Long term (≥ 4 years) |
| Corporate PPAs Surge among Luxury & FMCG Majors | +0.5% | National, with concentration in northern industrial regions (Lombardy, Veneto, Emilia-Romagna) | Medium term (2-4 years) |
| Superbonus 110% Stimulus for Rooftop PV | +0.4% | National, with highest uptake in northern and central regions | Short term (≤ 2 years) |
| Source: Mordor Intelligence | |||
Accelerated Permitting Reforms Under Legislative Decree 199/2021
The 2021 decree introduced single-window permitting for projects smaller than 10 MW and limited approvals to 12 months, down from the 36-month average between 2018 and 2021.[2]Terna S.p.A., “Italian Capacity Statistics 2024,” TERNA.IT Regional “suitable-area” maps now cover 18% of the national territory and unlocked 42 GW of previously stalled solar and wind applications by September 2024. The ministry can override regional vetoes for projects over 50 MW, a provision used 14 times in 2024 to advance offshore wind farms. Developers report that bottlenecks have migrated from environmental reviews to grid-connection studies, as Terna’s planning resources lag behind the surge in applications. While legal challenges remain, the streamlined process materially shortens development cycles and lowers carrying costs.
Grid-Scale Battery Capacity Market Auctions (Terna)
Terna’s inaugural auction in November 2024 awarded 9 GW across 47 projects with 15-year revenue guarantees averaging EUR 55,000 (USD 60,500) per MW annually. Contracts prioritize four-hour lithium-iron-phosphate systems, exclude chemistries with cycle lives below 6,000, and concentrate capacity in Sicily, Apulia, and Sardinia, where curtailment reached 1.2 TWh in 2024. Enel captured the largest share at 2.1 GW by co-locating batteries with existing solar sites, bypassing land-acquisition delays. Success depends on Terna finishing southern grid reinforcements by 2026; slippage could erode project economics and trigger renegotiations.
Coal Phase-Out by 2025 Creating Capacity Gap
Closure of the 1,280 MW Federico II (Brindisi) and 660 MW Monfalcone stations by year-end 2025 removes 5.5 GW that produced 8% of generation in 2024. Terna’s 2024 adequacy study warns of up to 2.1 GW of winter shortfalls in 2026-2027 under low-hydro conditions. Mitigation includes converting 1.9 GW of oil-fired units to gas and enrolling 1.4 GW of industrial load in interruptibility schemes that pay EUR 40,000 (USD 44,000) per MW each year. The phase-out accelerates renewable build-out and storage uptake but temporarily deepens reliance on imported gas.
REPowerEU-Funded HVDC Projects (Tyrrhenian Link)
Construction of the 970 km, 1,000 MW HVDC cable began in January 2024 with EUR 1.9 billion (USD 2.1 billion) in EU grants. The link lets Sicily export surplus renewable output, 12.3 TWh generated versus 8.7 TWh consumed in 2024, reducing the 1.8 TWh of curtailment recorded that year. Voltage-source converters enable black-start capability for mainland outages. Seabed ordnance clearance and fishing-industry consultations pose schedule risks, but the project is pivotal for unlocking southern solar and offshore wind zones.
Restraints Impact Analysis
| Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Grid Congestion in Apulia & Sicily (≥36-month Delays) | -0.7% | Southern Italy (Apulia, Sicily, Calabria) | Medium term (2-4 years) |
| Offshore Wind Tender Under-realisation (Adriatic) | -0.4% | Adriatic and Tyrrhenian coastal regions | Medium term (2-4 years) |
| Gas-Import Exposure to Geopolitical Shocks (≈90%) | -0.5% | National, with acute impact on northern industrial regions | Short term (≤ 2 years) |
| Landscape-related Permit Litigation for Wind Farms | -0.3% | National, concentrated in Tuscany, Lazio, Sardinia, Sicily | Long term (≥ 4 years) |
| Source: Mordor Intelligence | |||
Grid Congestion in Apulia & Sicily (≥36-Month Delays)
Apulia and Sicily submitted 47 GW of connection requests in 2024, yet Terna studies show only 12 GW can be accepted without upgrades, pushing timelines beyond three years.[3]Terna S.p.A., “Grid Development Plan 2024-2033,” TERNA.IT Legacy 150 kV networks experience voltage instability during midday solar peaks, forcing 1.2 TWh of curtailment in 2024 and costing developers EUR 180 million (USD 198 million) in lost revenue. Terna’s 2024-2033 plan budgets EUR 4.2 billion (USD 4.6 billion) for three new 380 kV lines and dynamic line-rating systems, but permitting and land acquisition could delay completion to 2030. Developers respond by adding batteries that shift generation to evening hours, raising capex by EUR 300,000 (USD 330,000) per MW yet stabilizing cash flows.
Gas-Import Exposure to Geopolitical Shocks (≈90%)
Italy imported 90% of its 68 billion m³ gas demand in 2024, with power generation accounting for 48% of national electricity output. Although two floating LNG terminals added 10 billion m³ of capacity in 2024, prices remain indexed to Dutch TTF benchmarks, sustaining volatility. Industrial users in Lombardy and Veneto accelerated electrification, installing 1.8 GW of self-generation solar and converting process heat to electric solutions that lifted power demand by 2.3 TWh in 2024. Government targets cut gas imports to 70% of consumption by 2030, contingent on annual renewable additions doubling to 8-10 GW.
Segment Analysis
By Power Source: Renewables Dominate Capacity Additions
Renewables supplied 70.4% of installed capacity in 2024, a figure projected to climb as solar and onshore wind expand at a 10.4% CAGR through 2030. Solar reached 32 GW, with Sicily and Apulia contributing nearly half of the new arrays thanks to irradiation above 1,700 kWh/kWp and industrial offtakers nearby. Wind stood at 13 GW, 11.2 GW onshore and 1.8 GW offshore, and faces permitting delays at sea but steady progress on land. Hydropower’s 23 GW fleet delivered 12% less energy in 2024 due to Alpine drought, prompting utilities to retrofit pumped-storage units for enhanced flexibility. Geothermal remained stable at 900 MW in Tuscany, while biomass and waste-to-energy totaled 2.1 GW, hampered by local opposition to new incinerators.
Thermal fleets represented 29.6% of capacity in 2024 and will drop to 18% by 2030 as coal exits and gas shifts to peaking service. The Italian power market share for renewables in capacity terms is expected to surpass 80% by 2030, underscoring the structural pivot away from fossil fuels. Nuclear capacity remains zero under the post-1987 moratorium, though policymakers reopened discussions on small modular reactors for post-2035 industrial use.
Note: Segment shares of all individual segments available upon report purchase
Get Detailed Market Forecasts at the Most Granular Levels
Download PDF
By End User: Utilities Lead Demand Growth
Utilities supplied 64.7% of electricity demand in 2024 and are projected to grow at 6.6% annually through 2030, driven by grid-scale storage rollouts and long-term PPAs that hedge price risk for corporate buyers. Enel Energia, Edison Energia, and A2A Energia serve 18 million residential and 2.4 million commercial accounts, offering time-of-use tariffs that shifted 1.2 GW of load to solar-rich midday windows in 2024. The commercial-industrial segment, 28% of demand, installed 1.8 GW of onsite solar last year, reducing exposure to gas-price volatility. Residential demand, at 7.3%, slowed after the Superbonus 110% expired, reducing annual rooftop additions from 1.1 GW in 2024 to an expected 600 MW in 2025 under a scaled-back 50% tax credit.
Rising electrification of process heat displaced 1.1 billion m³ of gas in 2024, while heat-pump uptake added 1.8 TWh to electricity consumption. Utilities support this shift by deploying smart meters and enrolling 240,000 households in demand-response programs that delivered 180 MW of flexible capacity during the July 2024 heatwave. The Italian power market size for the utility customer class is set to widen as corporate decarbonization goals tighten under EU reporting rules.
Note: Segment shares of all individual segments available upon report purchase
Get Detailed Market Forecasts at the Most Granular Levels
Download PDF
Geography Analysis
Sicily and Apulia together accounted for 38% of renewable connection requests and 48% of 2024 solar installations, yet transmission constraints forced 1.2 TWh of curtailment, highlighting the urgency of the Tyrrhenian Link and planned 380 kV reinforcements.[4]Terna S.p.A., “Regional Generation and Curtailment Data 2024,” TERNA.IT Once the 1,000 MW HVDC line is operational in 2028, surplus southern solar can reach Campania and Lazio load centers, reducing system imbalance. The Italian power market share for these two southern regions will continue rising as battery co-location eases curtailment pressure.
Northern industrial hubs, Lombardy, Veneto, and Emilia-Romagna, make up roughly 45% of national demand and are most exposed to imported gas price swings. Electrification of steel, ceramics, and chemical processes added 2.3 TWh to the 2024 load, yet these regions welcome renewable imports via new north-south corridors and rooftop solar on industrial estates. The Italian power market benefits from a diversified geography as northern flexibility balances southern generation peaks.
Sardinia remains a strategic outlier: abundant wind and solar resources, yet limited export capacity until the planned 600 MW Sardinia-Corsica-Mainland cable enters service in 2029. The island hosts 18% of Terna’s awarded battery contracts, positioning it as an early laboratory for extended-duration storage. Regional governments aim to replace legacy oil plants with hybrid renewables and storage, elevating Sardinia’s contribution to the national capacity mix by decade-end.
Competitive Landscape
Market concentration is moderate: Enel, Edison, and A2A controlled 52% of 2024 generation capacity, while a diverse field of international developers captured 38% of new renewable additions. Incumbents defend their share through vertical integration, leveraging regulated returns in distribution to fund renewables expansion. Terna’s updated grid code, requiring synthetic inertia and grid-forming capabilities, imposes higher technical hurdles that favor large, seasoned operators.
Technology differentiation is sharpening competition. Vestas secured 1.2 GW of onshore turbine orders in 2024 by offering 30-year availability guarantees. Siemens Gamesa focuses on 15 MW offshore platforms, targeting tenders slated for 2025. Prysmian Group, operator of the Leonardo da Vinci cable-laying vessel, monopolizes deepwater HVDC installation and won the Tyrrhenian Link contract. Compliance with the EU Taxonomy and Corporate Sustainability Reporting Directive drives buyers toward suppliers with transparent, audited chains of custody, tilting the playing field toward established firms.
White-space opportunities concentrate in solar-plus-storage hybrids in curtailment-prone southern zones and in offshore wind, where only 1.8 GW of the 8 GW pipeline has reached financial close. International investors with balance-sheet strength and community-engagement expertise are positioned to secure concessions as local opposition ebbs in response to job-creation assurances and revenue-sharing schemes.
Italy Power Industry Leaders
-
Enel SpA
-
Edison SpA
-
A2A SpA
-
ERG SpA
-
Terna SpA
- *Disclaimer: Major Players sorted in no particular order
Need More Details on Market Players and Competitors?
Download PDF
Recent Industry Developments
- February 2025: Cable laying began on the Tyrrhenian Link, the 1,000 MW HVDC project linking Sicily, Sardinia, and mainland Italy.
- December 2024: TotalEnergies bought VSB Group for EUR 1.57 billion, adding 3 GW managed Italian assets and an 18 GW pipeline.
- December 2024: SUSI Partners acquired full control of Genera Group, deepening its renewable services presence.
- July 2024: Sosteneo and Enel signed a 1.7 GW battery storage partnership.
Research Methodology Framework and Report Scope
Market Definitions and Key Coverage
Our study counts the Italy power market as the sum of all utility-scale and captive generation assets physically located in the country; capacity is expressed in gigawatts of net installed power and covers thermal, hydro, wind, solar, geothermal, and bioenergy plants. Electricity imported through interconnectors is excluded from the baseline, yet its impact is treated in demand modeling.
Scope exclusion: Transmission and distribution hardware, retail energy services, and auxiliary backup sets below 1 MW lie outside this sizing.
Segmentation Overview
- By Power Source
- Thermal (Coal, Natural Gas, Oil and Diesel)
- Nuclear
- Renewables (Solar, Wind, Hydro, Geothermal, Biomass & Waste, Tidal)
- By End User
- Utilities
- Commercial and Industrial
- Residential
- By T&D Voltage Level (Qualitative Analysis only)
- High-Voltage Transmission (Above 230 kV)
- Sub-Transmission (69 to 161 kV)
- Medium-Voltage Distribution (13.2 to 34.5 kV)
- Low-Voltage Distribution (Up to 1 kV)
Detailed Research Methodology and Data Validation
Primary Research
Mordor analysts interviewed grid planners, IPP managers, OEM service engineers, and energy-policy advisors across Lombardy, Sicily, and Lazio. These conversations validated retirement dates, average heat-rate evolution, and realistic construction lead times, filling gaps that desk research alone left open.
Desk Research
We began with public datasets from Terna's monthly capacity bulletins, Eurostat energy balances, IEA Electricity Information, and ENTSO-E transparency files, which gave dependable plant-level or technology-level figures. Financial filings from listed generators, parliamentary energy bills, and reputable press pieces such as Il Sole 24 Ore helped track commissioning delays and policy inflections. D&B Hoovers and Dow Jones Factiva, two of Mordor's paid databases, supplied historical investment and outage records. The sources cited are illustrative; many more feeds were screened, tagged, and archived for cross-checks.
Market-Sizing & Forecasting
A top-down reconstruction starts with Terna-verified capacity by technology for 2024; additions and retirements are layered on through 2030 using announced project pipelines, average permitting-to-COD lags, and expected capacity-factor improvements. Target figures are then reconciled with a sampled bottom-up roll-up of large plant nameplates and channel checks to fine-tune totals. Key variables like renewable auction awards, gas-price indexed dispatch costs, and grid connection queue lengths drive scenario spreads that feed an ARIMA forecast of annual net additions, which our domain experts reviewed before lock-in.
Data Validation & Update Cycle
Outputs run through variance dashboards that flag deviations versus IEA regional means and Terna's quarterly revisions; anomalies trigger a secondary analyst review. Reports refresh each year, and material policy changes prompt interim updates so clients always receive our latest calibrated view.
Why Mordor's Italy Power Baseline Commands Reliability
Published estimates often diverge because firms choose different scope boundaries, valuation units, and refresh cadences. Our disciplined capacity-based framework, refreshed annually, minimizes those mismatches.
Key gap drivers include rivals valuing revenue rather than physical capacity, omitting pumped-storage assets, or applying static currency conversions that distort euro-to-dollar trends.
Benchmark comparison
| Market Size | Anonymized source | Primary gap driver |
|---|---|---|
| 137.53 GW (2024) | Mordor Intelligence | - |
| 136.80 GW (2024) | Regional Consultancy A | Excludes cross-border pumped storage and captive CHP |
| USD 105.6 B (2024) | Global Consultancy B | Tracks sales revenue, not installed capacity; price assumptions undisclosed |
| USD 27.6 B (2024) | Trade Journal C | Uses average wholesale price only; limited value-chain coverage |
These contrasts show that Mordor's capacity-anchored, multi-variable model delivers a balanced, transparent baseline that decision-makers can readily trace and replicate.
Need A Different Region or Segment?
Customize Now
Key Questions Answered in the Report
How large is the Italy power market in 2025?
Installed capacity reaches 148.76 GW in 2025, keeping the Italy power market on track to exceed 190.10 GW by 2030.
What is driving new capacity additions?
Streamlined permitting, 9 GW of battery contracts, and the 2025 coal phase-out accelerate solar and wind build-out.
Which regions face the greatest grid congestion?
Apulia and Sicily experience the longest connection delays and the highest curtailment volumes.
How will the Tyrrhenian Link affect the system?
The 1,000 MW HVDC cable lets Sicily export surplus renewables to mainland demand centers, cutting curtailment losses.
Who are the leading companies?
Enel, Edison, and A2A lead generation and retail, while RWE, Iberdrola, and Renantis dominate new renewable projects.
What role do batteries play?
Grid-scale batteries awarded under Terna’s 2024 auction provide four-hour storage that shifts midday solar to evening peaks.
Page last updated on:
