Development Abroad

EU6With regard to its international development activities, Terna has focused its industrial development on the strategic areas located around the Mediterranean. In particular, development areas regard North Africa and the EU23Balkan countries with which the Italian government is implementing inter-governmental cooperation and development agreements in the electricity sector as well as for promoting renewables.

The purpose of expanding the Company’s activities in strategic areas is to increase its ability to import electricity through new interconnections with neighboring countries; this will allow obtaining benefits in terms of increased safety for the Italian electricity system and, more generally, of the diversification of electricity supply sources from abroad, of increased competition on the Italian electricity market and of the reduction of electricity prices.

The new submarine power line between Italy and Montenegro, under construction, is the most significant electricity interconnection project for linking Italy with the Balkan area. Terna is not carrying out operational activities in North Africa as of now, preliminary studies are only being conducted.

The Balkans

The Balkans represent for Terna the most interesting strategic development area based on the geographical proximity and on the region’s energy potential, particularly regarding renewables.

The region currently has the most attractive nearby power market based on the expected medium- and long-term power surplus thanks to its unused potential of hydroelectric power, wind power and biomasses. Accessing this market will allow diversifying supply sources at competitive production costs.

The opportunities for developing production from renewable sources in the Balkan area also represent a possible opportunity for complying with EU targets for the reduction of CO2 emissions. 

Montenegro is the country of greatest interest to Terna in the Balkans thanks to its optimal geographical location for the national market needs and to the availability of a transmission grid that is in good conditions and well connected with the future production hubs planned in the area (Bosnia-Herzegovina, Serbia, Albania and – via Serbia – Bulgaria and Romania). These characteristics make it the best candidate for carrying out the role of electricity exchange platform between Italy and the South-Eastern European area, characterized by a significant power surplus in the short-and medium term at lower costs compared to Italy.

The new submarine power line between Italy and Montenegro will link Italy to the Balkan area through 415 km of cable between the 400 kV junctions in Villanova (Pescara) and Tivat (Montenegro), with a 1000 MW transfer capacity. The infrastructure is part of Terna’s NTG Development Plan approved by the Ministry for Economic Development and is carried out according to the same rules that regulate (for example in the field of bids) grid development investments in Italy.

In November 2010 and in January 2011 binding agreements were signed between Terna, Montenegro’s government and the local transmission operator CrnoGorski Elektroprenosni Sistem AD (CGES) for building the cable between Italy and Montenegro and for the strategic partnership with CGES. These agreements regulate modalities, coordination and the timeframe for implementing the infrastructures. The cable’s entrance into operation is scheduled by agreements to take place by 2015 on the part of both the operators. Along with the submarine interconnection, a development plan for grid infrastructures has also been scheduled to be carried out by CGES.

The authorization process for the Italian side ended on July 28, 2011 with the authorization for building and operation issued by the Ministry for Economic Development. In Montenegro, the project was included in the detailed zoning scheme approved by Montenegro’s government on July 28, 2011 and published on September 23, 2011. The project is currently being implemented by Terna and by Montenegro’s operator CGES.

To complete building the new submarine connections, Terna will develop grid infrastructures in the Balkan countries in order to strengthen the electricity exchange corridors with Italy and guarantee Italian electricity market operators the opportunity to import from the region. Within this context, and in association SAE Power Lines, Terna has built the 400 kV Tirana-Elbasan electricity line in Albania, successfully tested in March 2011.

Terna is also present in Kosovo, with technical assistance activities in favor of TSO KOSTT, focused on the operation of the electricity system and on international regulatory aspects for the electricity market. In partnership with the Scottish IPA, the contract is financed by the European Commission and has a total duration of 46 months, expected to terminate in January 2013.

June 2011 marked the successful conclusion of the technical assistance in favor of the Serb regulatory authority AERS following the previous experiences with the Turkish TSO (TEIAS), the Ukrainian Ministry of Energy, the Albanian distribution company KESH and the Albanian TSO (OST).

North Africa

Terna does not currently have any investment activities in North Africa but is only conducting studies and preliminary development activities.

Infrastructures (energy, water, transportation and related activities) represent the basis for the area’s social and economic development: new market spaces open for companies operating in the electricity infrastructure sector, historically concentrated on national markets.

As part of interconnection projects with North African countries, Terna prefers integrated projects for electricity production and transfer, particularly referred to renewable sources whose use includes advantages for the environment and strengthens investment safety by improving the risk profile.

A strategic geographical position and a solid interconnection capacity with the European grids capable of supporting the efficient development of exchanges, make Terna a referent for connecting North African grids to Europe.

This development strategy is implemented by integrating the Euro-Mediterranean electricity grid for:

  • enhancing the availability of renewables located along the southern coast of the Mediterranean by connecting them to end markets;
  • promoting the building of electricity infrastructures along the southern coast, necessary for implementing international energy exchanges along the South–South and South-North axes.

This approach is based on a multi-lateral Euro-Mediterranean cooperation project by:

  • building an electricity corridor Maghreb - Europe, with interconnection projects with Tunisia and Algeria;
  • participating in international cooperation, institutional and industrial initiatives.

Interconnection projects currently being developed are:

  • Elmed Project: an integrated production and transmission project based on market procedures that includes producing electricity in Tunisia and exporting it towards Italy, according to an Italian-Tunisian intergovernmental agreement that guarantees institutional coverage to the industrial initiative. On the basis of this agreement, Terna and the Tunisian national electricity company STEG signed a partnership agreement for implementing the Project; they also formed a mixed company (Elmed Études) responsible for providing assistance to the Tunisian Ministry for managing the bid aimed at granting production rights in Tunisia and export rights to Italy.
    The Project has not yet entered the operational phase and includes:

    • a production mix from renewables (min. 100 MW) and conventional sources in Tunisia for 1,200 MW, 400 of which for the Tunisian market and 800 for export to Italy, by the party that will be granted production rights in Tunisia, selected through an international bid launched by the Tunisian government;
    • an Italy-Tunisia interconnection via submarine cable, built and managed by a mixed company Terna-STEG, with Terna as major shareholder; the transfer capacity will be of 1,000 MW. 
  •  Italy-Algeria interconnection: as part of an interconnection between the Algerian and Italian electricity systems – and, more generally, between the Maghreb and Europe – Terna and Sonelgaz signed an agreement (March 2011) for the electricity connection between the two countries.
    Specifically, the agreement regards updating and implementing a previous feasibility study for the submarine interconnection between Algeria and Italy, completed in 2004 by former GRTN with Sonelgaz and defining technical, economic, industrial, institutional and regulatory conditions for its implementation. According to the activity plan, Terna and Sonelgaz aim at initiating in 2012 the authorization process for the interconnection.

Other cooperation initiatives include:

  •  Paving the Way for the Mediterranean Solar Plan: the European Commission project for implementing and developing the Mediterranean Solar Plan that Terna is carrying out in association with RTE (France), Sonelgaz (Algeria), MVV Decon (Germany) and with ENEA.

The project includes technical assistance activities to nine beneficiary countries from the MENA Area (Middle East – North Africa), for defining a legal and regulatory framework promoting energy production from renewable in the southern Mediterranean coasts and integrating the electricity systems of the two Mediterranean coasts.

The Consortium closely coordinates its activities with the authorities of the beneficiary countries and carries out know-how transfer. Terna’s contribution is focused on assessing production and transmission systems of the countries involved, on submitting proposals for developing renewable energy exchanges and on defining a regulatory framework that is harmonized throughout the Mediterranean area for promoting the integration of regional electricity systems.

  •  Medgrid: is a joint venture governed by French law, aimed at creating a Euro-Mediterranean electricity grid for exchanging renewable energy among the countries of the MENA Area and transferring it to Europe.
  •  Desertec: a German headed industrial initiative with the objective of promoting a Euro-Mediterranean cooperation project for producing electricity, mainly from renewables, in North Africa and in the Middle East (MENA Area).

Med-TSO: Terna for a Euro-Mediterranean electricity gridEU6

The Mediterranean’s social and economic development requires the availability of electricity infrastructures supportingproduction activities and a framework of clear and stable regulations for implementing long-term infrastructural investments.

Within this context, Terna has promoted together with the Algerian electricity company (Sonelgaz) and with the Tunisian electricity company (STEG), the creation of Med-TSO, the association of Mediterranean grid operators.

The initiative, currently being finalized, aims at creating a free and independent area among the Mediterranean TSOs and at guaranteeing the necessary connection between regulatory duties (specific to regulatory authorities) and those for the operational management of electricity systems.

Med-TSO holds the role of natural interface for Med-Reg (Association of Mediterranean Regulators) and Entso-E (Association of European TSOs).

In November 2011, the first organizational meeting among TSOs was held in Naples, under the patronage of Med-Reg and of the Parliamentary Assembly of the Mediterranean, during which nearly two thirds of the 24 coastal Mediterranean TSOs expressed their interest in joining the Association. The formal establishment of the Association took place in Rome at Terna’s headoffice on April 19, 2012.


The Northern Frontier

On the northern frontier the most important development project is the one regarding the 1000 MW interconnection with France connecting Piossasco, (Turin) and Grand’Ile, (France)with a direct-current cable that will be completely buried or integrated in the infrastructure of the A32 Fréjus highway. With its long tunnels and viaducts and its extremely low environmental impact, this technological project is unparalleled in the world. Authorized by the Italian authorities in March 2011, the line will be 190 kilometers long – nearly half of which in Italy – and will use the highway and the new Fréjus service tunnel. The benefits for the Italian electricity system consist in an increase in its ability to import lost-cost power and in the security and diversification of its supply sources.