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The environment markets

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Environmental sustainability and the fight against climate change are the key matters to be found on the agenda of governments and the media. For its part the European Union is determined to pursue increasingly ambitious environmental policies to give a strong technological thrust to member states.
On March 3, 2011 the framework for providing support and incentives to renewable sources - electric and thermal - and energy efficiency was approved in Italy. The implementing Ministerial Decrees are expected to be published in 2012.
As far as the environmental markets are concerned, the Directives form part of a regulatory framework that envisages the considerable involvement of businesses through mechanisms of a cap and trade nature (meaning based on setting a threshold and creating a trade exchange mechanism), which enable environmental objectives to be reached at the lowest overall economic cost for the system.
There are currently three regulatory schemes in the environment sphere in Italy of a cap and trade nature (see the figure):

The environment markets

 

  • Emissions Trading Scheme (ETS) which linked to the 1997 Kyoto Protocol has the aim of containing carbon dioxide emissions;

  • White Certificates  (or Energy Efficiency Certificates) which have the objective of increasing energy efficiency in the end consumption of energy and the use of thermal renewable sources;

  • Green Certificates  whose aim is to increase the production of energy from renewable sources and which will remain in force until 2015. In 2016, this mechanism will be replaced by another of a feed-in tariff nature.

Given the complexity of its activities in the energy and environmental sectors, A2A is heavily involved and has adopted an interdisciplinary and intercompany approach which involves and coordinates all the Group’s staff working in production, the distribution of energy vectors, planning, the environment, investor relations, communications and trading. A2A Trading’s “Environmental Markets” handles the overall portfolio of the Group’s environmental certificates through bilateral deals and by participating on all of the sector’s main organised markets.

Numerous plants form part of the environmental markets and these are to be found in various Group companies:

  • Emissions Trading Scheme: 27 plants of which 10 thermoelectric plants, 2 waste to energy plants and 15 cogeneration and boiler plants;

  • Green Certificates: 30 plants directly involved in the green certificate mechanism including production plants with conventional sources and those with renewable or cogeneration sources.

In terms of energy efficiency, A2A is the third leading national operator as far as energy savings objectives are concerned, amounting in 2011 to 288,265 toe (tonnes of oil equivalent), a figure that corresponds to slightly more than 5% of Italy’s target of 5.3 Mtoe and which continually rises until 2012. During 2011 the Group set up an internal working group with the aim of encouraging and supporting a reduction in the consumption of primary energy on end usage through the use of White Certificates, in Group companies and at third parties.
In addition, pursuing a strategy of reducing CO2 emissions and on the basis of studies conducted in 2010, A2A began collaboration in Montenegro with the affiliate EPCG to set up projects to reduce emissions of greenhouse gases called the Clean Development Mechanism, as part of the Kyoto Protocol. The first step consisted in constructing the hydroelectric plant at Otilovici in the north eastern part of Montenegro, where the validation procedure began in November 2011; in addition to reducing CO2 emissions this will also contribute to the country’s sustainable development.

 

ENVIRONMENTAL MARKETS FOR THE A2A GROUP
 Emission
Trading
Green CertificatesWhite CertificatesGreen
Pricing
Production of energy from conventional sources    
Trading power foreign markets / import/export of energy

   
Production of energy from renewable sources    
Electricity distribution      
Gas distribution      
ESCO/services/sale of heat      
Waste to energy plants
   
District heating/cogeneration  
Sales to end customers