Italy’s Terna announces €16.5bn investment plan guided by twin transition

Italian TSO Terna has announced investment plans of up to €16.5 billion ($17.9 billion) to accelerate decarbonisation in Italy, the highest in the Group’s history. The Group cites the twin transition concept – that of digital and energy – as a guiding principle.

The investment plan covers the period 2024 to 2028, with €2.6 billion ($2.8 billion) to be invested this year.

Terna cites the concept of the twin transition as the foundation of their new Industrial Plan, which has earmarked approximately €2 billion ($2.2 billion) for digitalisation and innovation, up 60% compared to the previous plan.

This investment in digital technologies and tools, such as AI and robotics, will enable the grid to be increasingly connected, smart and secure, says the TSO in a statement.

The most important initiatives under this banner will include grid engineering, introducing software to digitalise the planning of worksites and optimising the management of contracts, ensuring the on-time delivery of projects.

Dispatching will increase the algorithmic capacity of its systems, harnessing AI to boost transmission capacity. In response to the expected increase in complexities involved in managing the grid, asset management will also continue to use digital technologies such as digital twins, IoT and predictive tools.

Finally, digitalisation will also involve human resource management processes.

“I am proud to present the Industrial Plan with the highest level of investments in Terna’s history: €16.5 billion over five years, with around 80% of projects already authorised and more than 70% covered by existing procurement contracts,” said Giuseppina Di Foggia, Terna’s chief executive officer and general manager, in a release.

“Grid development must inevitably be accompanied by significant growth in the use of digital technologies to support and accelerate the country’s energy transition: a twin transition, energy and digital, will ensure a faster, sustainable, just and inclusive transition for all our stakeholders.”

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Expenditure 2024 to 2028

Regulated Activities in Italy will continue to represent the Group’s core business. Terna plans to deliver €15.5 billion ($16.8 billion), with approximately €1.1 billion ($1.2 billion) to be funded by non-repayable public grants.

Specifically, Terna intends to boost investment in developing the national power grid, with expenditure totalling €10.8 billion ($11.7 billion).

Under this financing are projects linked to the construction of direct current power lines and of submarine cables, with the goal of easing grid congestion, boosting transmission capacity between different market areas, integrating renewable sources and improving quality of service.

Cross-border interconnections will also increasingly reinforce the role of Italy as the Mediterranean electricity transmission hub, boosting the system’s reliability and security.

The most important projects in the 2024-2028 investment Plan, states Terna, include the Tyrrhenian Link, the Adriatic Link, Sa.Co.I.3 and the Chiaramonte-Gulfi-Ciminna power line in Sicily.

Cross-border interconnections will also play a major role, above all the invisible energy bridge Elmed, a submarine interconnection between Italy and Tunisia that will optimise exchanges between Europe and North Africa.

Furthermore, investments in grid development will include innovative projects such as the Milan-Montalto connection, which will use direct current transmission technology, and the Central Link. These projects will be implemented following a modular approach to planning based on shifts in demand and generation capacity.

Approximately €1.7 billion ($1.8 billion) will be invested in the Defence Plan, with the aim of boosting the system’s technical and technological capabilities.

This will involve projects designed to improve voltage regulation and the dynamic stability of the system, including the installation of synchronous compensators and STATCOM devices to manage energy flows.

Finally, approximately €2.9 billion ($3.1 billion) will be spent on asset renewal and efficiency.

With this plan, the Group’s revenues are expected to rise to €4.6 billion ($5 billion) in 2028, whilst EBITDA is expected to be €3.25 billion ($3.52 billion).

In 2024, revenues are expected at €3.55 billion ($3.9 billion) and EBITDA at €2.42 billion ($2.62 billion).