The Future of Italy’s Renewable Energy: Opportunities and Challenges

Italy is on the brink of a renewable energy revolution. According to projections, total generation capacity is expected to skyrocket to 223 gigawatts (GW) by 2040, with a remarkable 55 percent of that capacity being derived exclusively from solar sources. This ambitious move towards sustainable energy aligns with global efforts to combat climate change. However, as exciting as this outlook may be, it comes with its set of challenges—most notably, the bottlenecks in the transmission system that could hinder progress.

The Growing Burdens of Grid Curtailment

A significant concern for Italy’s renewable energy landscape is the projected rise in grid curtailment, which refers to the practice of intentionally reducing the amount of power that can be generated. Aurora Energy Research forecasts that curtailment could reach a staggering 2 terawatt-hours (TWh) by 2030, doubling to 4.4 TWh by 2035. These figures paint a concerning picture of the challenges facing Italy’s energy infrastructure as it struggles to keep pace with rapid renewable generation.

The North-South Divide: A Structural Imbalance

One of the undercurrents driving this grid curtailment is a structural imbalance between demand and generation within Italy. Approximately half of the country’s electricity demand is centered in the North, while a significant amount of renewable generation, especially solar energy, is produced in the South. This geographical mismatch leads to localized oversupply in areas like Foggia and Trapani, where solar and wind capacities are expanding at an alarming rate. By 2060, Aurora predicts that over 75 percent of solar growth in the South will be situated around Foggia, escalating the local imbalance and pressing against the limits of the existing grid.

The Risks for Investors

Investors keen on tapping into Italy’s renewable energy sector must navigate these complexities. Aurora’s report highlights that renewable assets, particularly in the Southern regions, are increasingly vulnerable to curtailment risks. Areas like Trapani could face significant disruptions that may affect revenue, with some renewable facilities losing up to 10 percent of their annual income if curtailment remains unaddressed. This risk is heightened because curtailment isn’t uniformly distributed; localized bottlenecks can vary even within the same region, complicating investment decisions further.

The Importance of Grid Upgrades

To mitigate these risks, the report emphasizes the crucial role of grid upgrades. Enhancements in the transmission system are not just desirable; they are imperative for supporting Italy’s aggressive renewable energy targets. As highlighted by Maddalena Cerreto, Lead Expert at Aurora Energy Research, even with planned flexibility investments and necessary upgrades by transmission system operators (TSOs), curtailment is still set to increase. This reinforces the idea that investment in grid infrastructure is not merely a component of the strategy; it is a foundational necessity.

Future Projections and Strategies

In 2024, Italy experienced significant renewable energy curtailment, with 338 GWh lost in the system. Aurora’s forecasting models indicate that this trend will continue, potentially increasing by six times by 2030. Given the localised nature of curtailment risks and the complexities associated with assessing them, stakeholders are urged to factor these considerations into their renewable energy investment strategies.

Navigating the future demands a keen outlook, strategic planning, and robust infrastructure investment. As Italy paves the way for a greener future, understanding these dynamics will be crucial for all actors within the renewable energy space.

For those interested in a deep dive into these projections, the report “Italian Renewables Grid Curtailment Forecast August 2025” is now available for subscribers. For more detailed information, interested parties are encouraged to connect with Aurora Energy Research directly.

For additional insights and updates, visit Aurora Energy Research.