Snam is a prominent Italian natural gas infrastructure company as well as Europe’s leading gas utility. The company, which has been around for more than seven decades and originally started out as a subsidiary for the Italian energy company Eni, is currently working to connect the continent by bringing energy from the south to the north. In March, the company completed a pipeline upgrade that allows the reverse flow of gas, marking the first time Italy has been able to export its gas.
“Italy as a gas hub has become a little bit of a slogan,” said Snam CEO Marco Alverà. “Technically we are a hub after March because the definition of a hub is when you start exporting, and this is a key milestone in our history.”
This is only the first step to increasing Italy’s connective energy activities. The pipeline opportunities for new sources of gas are all around the Caspian Sea and Eastern Mediterranean, according to Alverà, meaning potential new routes will be coming to Europe from the south and southeast. “From this perspective, Italy is ideally positioned to play this role as a gas hub,” he said.
For example, a consortium led by Snam – along with Spain’s Enagas and Belgium’s Fluxys – recently won the tender for a 66 percent stake in Greece’s gas transmission system operator DESFA, as part of the country’s ongoing privatisation commitments. DESFA runs a network for transporting gas from the Greek-Bulgarian and Greek-Turkish borders through a circa 1,400-km pipeline. They also operate a liquefied gas terminal on an islet off Athens.
DESFA “strengthens the cooperation between Italy and Greece and the whole of the southern European countries in achieving for the first time a project where we can really physically integrate and interconnect this infrastructure,” said Alverà, who is also president of GasNaturally, an initiative to showcase the essential role of natural gas in Europe’s energy transformation to cleaner sources.
Italy’s own energy transformation goals are outlined in the National Energy Strategy (NES), which is a 10-year roadmap to reduce the cost gap between Italy and the EU, strengthening Italy’s energy independence, and meeting highly ambitious environmental targets. The NES aims to phase out all coal use for electricity by 2025, while increasing the deployment of renewables in its place. By 2030, the country aims to generate 55 percent of all electricity from renewables, an increase of more than 20 percent compared to 2015.
Alverà believes that natural gas is renewables’ natural partner, given the intermittence of renewables’ energy generation and the fact that natural gas is much cleaner than coal.
“Where gas comes in today’s world, it’s the best partner because of the flexibility and the ability to store gas… it’s quickly available if we need to turn it on again on a rainy, windy day,” he explained. “Gas is becoming greener; it is becoming renewable.” Alverà noted that “Biomethane has the ability in Italy to supply about 10 percent of overall demand, and this is a completely renewable fuel that can use all the existing infrastructure.”
“Looking forward” to the energy landscape in the coming decades through innovation aimed at a cleaner energy future is something Snam – and Alverà – are highly adept at. The company is placing Italy at the forefront of natural gas-fueled cars, launching a 33 million euro tender earlier this year to convert Snam’s car fleet to natural gas with plans to develop 300 gas fueling stations.
“We are passionate about gas in cars,” Alverà said with a smile. “We have one million vehicles on the road, but what’s more important is that we have sold 30 percent more vehicles this year than last year in the first months of ’18 … it’s very good for the pocket, it’s very good for the environment, and it’s very good for mileage, and it’s the same car.”
To do this, Snam is simply adding a natural gas tank to a petrol tank, which makes the air quality emitted from the car as good as a full electric vehicle. This creates consumer savings of about 1,000 euros per year on an annual petrol bill.
This production process is also good for industry, Alverà noted, because it allows current car factories to stay open, since the engine is the same combustion engine that is manufactured today. And although electric cars are reaching a greater market share, “the remaining 60, 70, 80 percent are petrol and diesel cars,” he pointed out. “I think what’s more and more clear to consumers and to policy makers is that we need to accelerate the transition away from diesel onto gas cars and gas trucks and gas ships and maybe one day gas planes with great benefits for air quality and for CO2,” said Alverà.
Thus, while some may believe that Italy’s – and Europe’s – energy transition is aimed singlehandedly at renewables, it is clear that renewables will not be able to meet all of the country’s – and continent’s – energy needs (at least in the short and medium-term). Natural gas is the cleaner and cheaper alternative to coal and oil and, thus, can be a great partner to renewables. Italy’s Snam recognizes this and, under Alverà’s leadership, is doing all it can to support the energy revolution – both within and outside of Italy.