A scenario analysis of a pan-European electricity market: Effects of a gas shortage in Italy

Abstract

In the last decade, energy security has gained importance due to the high dependence of industrialized economies on energy consumption and to the increased risks of disruption in supply. In order to provide quantitative inputs to decision makers, a pan-European scenario analysis for the year 2015 has been carried out concerning the effects of a winter gas supply shortage in Italy, where a large share of electricity generation is based on natural gas as primary fuel. The objective of the analysis is a quantitative assessment of the impact of the considered Italian gas shortage on the European power system, from the point of view of security of supply, competitiveness and sustainability, i.e. the three “pillars” of the EU energy policy. The results of the study show that the availability of a significant national gas storage capacity, together with fuel switching capability and greater cross-border transmission capacity in the power sector are fundamental in order to assure security of electricity supply.