For the Western world, and for Italy in particular, the fall of 1973 was something of a rude awakening. After nearly three decades of almost constant economic growth, the modern world faced its first genuine major energy crisis. It was caused by the Yom Kippur War, which in October of that year saw Egypt, Syria and other Arab countries attack Israel. The intervention of the two superpowers - the US and the Soviet Union - brought about a quick cease-fire, with the war lasting around a couple of weeks. But the Arab oil-producing nations belonging to OPEC, whose weight within the crude oil market had grown significantly over the previous decade, decided to carry out what was, until then, an unprecedented act of retaliation against the Western countries that had supported Israel, including Italy: an oil embargo.
The consequence of hydrocarbon dependence and austerity
The surge in oil prices was immediate: by early 1974 the average price of a barrel had quadrupled, from $3 to $12. Italy was one of the most vulnerable countries, due to the fact that it had emerged from the previous decade heavily dependent on hydrocarbons: fuel oil was being used to produce 60 per cent of the nation's electricity, compared to the European average of just 30 per cent. In just a few short months, the amount that fuel accounted for in the final energy price doubled from 15 to 30 per cent.
And a period of austerity began. Sunday driving was often banned, there were days when only certain license plate numbers could take to the roads, and many measures were introduced to reduce domestic and commercial electricity consumption: reduced street lighting, early office and shop closures, and reduced power available for domestic properties.
The really difficult time during this period of austerity was relatively short, because the embargo came to an end in March 1974 after the US and Saudi Arabia reached a new agreement. But the message had got through. It was clear that there was a need to quickly diversify the sources of energy, focusing primarily on those for which Italy was less dependent on imports. And so the Italian government put it down in black and white and created the National Energy Plan, which was drafted by the Ministry of Industry in 1975 and approved by the Comitato Interministeriale per la Programmazione Economica (CIPE - Interministerial Committee for Economic Planning) at the end of that year. The plan included an entire section devoted to “Alternative Energy Sources,” such as geothermal energy, as well as a section covering the potential development of nuclear power. Enel took up the challenge, setting off on a journey of technological innovation and experimentation that would continue throughout the coming decades, paving the way for the current maturity in renewable energy sources.
A new direction for energy
The new direction included a renewed impetus on hydropower, an energy source that was already playing a major role in Italy's energy mix and even today still accounts for a significant proportion (40 per cent) of the country’s renewable energy. New facilities started springing up, such as the Taloro power plant, built between 1972 and 1978 to take advantage of the altitude difference between the Gusana and Cucchinadorza reservoirs in the province of Nuoro, in Sardinia. It uses an innovative, reversible system in which water can also be transferred from the lower to the upper lake, thus storing potential energy that can be turned into additional electricity when needed.
Entracque in the province of Cuneo was the location of Italy's largest hydropower plant. It took the rest of the decade to build, and was eventually inaugurated in 1982. It was dedicated to the economist and Italian President Luigi Einaudi. It has two dams, 42 million cubic meters of water, a total capacity of 1.3 GW, equal to the amount of power consumed by the entire province of Turin. It was a massive construction challenge that Enel undertook by paying maximum attention to the impact on the surrounding landscape and the local population.
Enel made a huge technological contribution to the development of nuclear power in Italy which, at that historic moment in time, was an unavoidable choice. The existing facilities at Latina, Garigliano and Trino Vercellese were joined in 1977 by Caorso, Italy's largest power plant. In 1982, work began on a plant in Montalto di Castro, and planning for additional facilities was initiated. However, in a very different historical context, it was a journey that would be interrupted in 1987 as a result of the referendum that followed the Chernobyl disaster. But, by then, an initial, important step towards the decarbonization of the Italian economy had already been taken.
The future in renewables
The 1970s saw the development of cutting-edge research into wind and solar power, with the first trials coming online early in the following decade. In Adrano, near Catania, in 1981, Enel inaugurated an innovative concentrated solar power plant, the 1 MW Eurelios solar tower. A trial that would last four years and provide important data for subsequent developments in solar technologies. In 1984, Italy's largest solar power plant was built on the island of Vulcano, covering an area of 4,350 square meters and capable of producing 80 kW with 2,000 Italian-made silicon photovoltaic modules. 1984 also saw the creation in Sardinia of the Alta Nurra “wind city,” a wind farm with the capacity to power approximately 800 apartments. It was the first wind farm in Europe to be connected directly to the central grid, a complementary, integrated system including traditional energy sources.
That pioneering commitment to renewables continued to grow over the decades, to the extent that Enel Green Power was established in 2008. A key player throughout the world in driving the growth of renewables, the Group now has more than 1,200 facilities worldwide generating a total capacity of more than 58,000 MW. In 2021, EGP added more than 5,000 MW of new renewable capacity which, for the first time, also included 220 MW of batteries: indeed, the development of state-of-the-art energy storage technologies is fundamental for stabilizing the production of intermittent renewable sources.
The scale of new projects is impressive, both from a quantity perspective, as well as in terms of technological innovation. This is evident in the large wind farm situated between Teruel and Zaragoza in Spain, 500 MW of capacity to which another 180 was recently added with the development of the new TICO facility. Or by the 3Sun Gigafactory in Catania, Italy's largest solar panel production plant and one of the largest in Europe: it opened in 2011 and will soon increase its production capacity to 3 GW.
The situation we find ourselves in today has many similarities to the 1973 scenario: high geopolitical tensions leading to regional conflict, but with global impacts on the energy markets as a result of fossil fuels being used as a tool for applying international pressure. The difference with respect to 30 years ago is that, with clear evidence that climate change is happening, there’s now a realization that the diversification of energy sources is a process that can no longer be postponed. For the energy sector, profound change is once again the only way forward. And Enel, precisely because of the journey it embarked on in the mid-1970s, is once again in a position to play a leading role in this transition.