Universal Registration Document 2022

Due to the geopolitical context, the sole Russian gas supply contract for 1bcm has not been renewed for 2023.

However, starting in 2023, Edison will import LNG from the United States under a contract with Venture Global, which is expected to begin in the second half of the year.

Gas infrastructures

Edison contributes to the development of gas import infrastructure projects through IGI Poseidon in which Edison owns a 50% stake⁽¹⁾. IGI Poseidon is promoting the following three projects:

• Eastmed, an interconnection between Greece and the eastern Mediterranean which will provide direct access to gas resources in the eastern Mediterranean (Israel, Cyprus), connecting them to the Greek, Italian and other European markets. The project is based on a 10bcm/year offshore/onshore line, expandable up to 20bcm/year, whose viability and sustainability have been demonstrated from a technological and economic point of view by engineering surveys carried out since 2014. The strategic relevance of the project has been confirmed by the 2020 intergovernmental agreement and by the Greek government granting the project the status of national importance and public utility. The project is in the final stage of development, so it may be ready for an investment appraisal in the coming years;
• Poseidon, an interconnection between Greece and Italy, which will allow available gas resources to be transferred from Greece to Italy by connecting to Eastmed. The project is a mature asset with finalised engineering activities and has obtained the required permits in Greece and Italy. In May 2020, it was declared a project of national importance for Greece;
• IGB, a 182km gas pipeline linking Greece and Bulgaria, which is operated by ICGB and is jointly owned by BEH ⁽²⁾ and IGI-Poseidon. This infrastructure has a capacity of 3 billion cubic metres of gas and was commercially launched in October 2022. Its commissioning opens up a new strategic supply route for the countries of Southeast Europe in terms of security and provides a diversification alternative to Russian gas. The gas pipeline received funding of €110 million from the European Investment Bank (EIB).

These projects are among the European Commission’s Projects of ordinary Interest, and benefit from EU aid: Eastmed will receive a matching contribution from the European Commission covering 50% of its development costs (i.e. about €37 millions).

Edison also has the right of use of 80% of the Rovigo long-term offshore regasification terminal’s capacity (6.4 billion cubic metres per year) where LNG imported from Qatar with Ras Laffan Liquified Natural Gas Company Limited II (RasGas II) is regasified.

Concerning LNG, since 2018 Edison has been engaged in the “small-scale LNG transportation” project for the development of an LNG marketing supply chain, with the aim of helping to reduce emissions by maritime and road transport. The project led by Depositi Italiani GNL (owned 30% by Edison ⁽³⁾) comprises the construction by Depositi Italiani GNL (in which Edison owns a 30% stake) of an onshore depot at the port of Ravenna where the LNG will be stored at a small, dedicated LNG terminal. The facility, which is now complete, has a capacity of over 1 million cubic metres of LNG per year (Edison will have right of use to 85% of its capacity). It will be able to supply LNG to 12,000 trucks and up to 48 ferries.

Furthermore, Edison plans to build additional facilities in southern Italy, including a facility in Brindisi, which has already received a building permit. They will be key components in the development of a logistics chain for sustainable mobility in the southern Italian Mezzogiorno region. For this purpose, from the funds available under the PNRR (Piano Nazionale di Ripresa e Resilienza), Edison recently obtained the possibility of receiving a grant of between €45 and 65 million for the construction of the Brindisi warehouse.

In order to develop small-scale LNG in Italy, Edison signed an agreement with Snam in 2022, which provides for the possibility of jointly developing and investing in certain projects. This initiative will build on the development of the Italian LNG sector to encourage the gradual replacement of diesel and support the use of liquid biomethane (bioLNG). The goal is to promote the decarbonisation of land, sea and rail transport, as well as industrial and civil off-grid uses.

1.4.5.2.3.3 Sales and marketing

In 2022, Edison sold 37TWh of electricity in Italy (compared with 34.8TWh(4) in 2021, i.e. down 6.2%), of which 19TWh were generated ⁽⁵⁾ and 18TWh were purchased on the markets. The 0.7TWh correspond to the energy and environmental services. Sales to end customers totalled 14.2TWh, up 6.6% compared to 2021 due to increased consumption by business customers and growth in the residential segment.

Gas sales increased to 21.1 billion cubic metres, particularly for thermoelectric uses (+6.9%) and on the wholesale market (+52.1%). Sales for industrial (-14.2%) and civil (-19.8%) purposes fell as a result of lower consumption due to price increases.

At the end of 2022, Edison was serving around 1.76 million customers in electricity and gas, in the business and residential segments (+10.6%).

The Group targets various market segments: residential, small businesses and large industrial customers. It offers electricity and gas supply solutions, as well as value- added services. Edison makes a concrete contribution to the energy transition through solutions that lower carbon footprints and environmental impacts, such as electric charging stations, solar panels, heat pumps and boilers.

To sell its electricity, gas and value-added service products to consumers and small businesses, Edison has adopted a multi-channel marketing approach that focuses on both physical and digital approaches. Firstly, Edison uses a network of technical partners and installers throughout the country, as well as its own shops and those of its partners. Secondly, Edison has increased the number of digital contact points (Private area and app) through which it can market its offers to individuals.

Given the significant price increases and price volatility experienced during the year, Edison stood by its retail customers who were faced with high bills. Edison informed its customers continuously and offered consumption monitoring services. Edison also offers its customers in difficulty a personalised payment schedule, particularly for households and small businesses, such as merchants and practitioners of liberal professions.

In May 2022, Edison acquired a majority stake in Gaxa, thereby entering the retail market in Sardinia ⁽⁶⁾. As a result of this acquisition it increased its customer base and became the island’s leading operator in terms of gas sales. Its objective is to contribute to the development of the retail gas market in Sardinia in an environment where methanation is developing.

Edison has also proposed an ambitious energy communities development plan. These communities are associations of users who share the energy they produce from renewable sources to cover their own consumption. The goal is to set up 200 such communities in Italy by 2024. Edison, in partnership with Gabetti Lab, has begun work on developing two energy communities of co-owners, which are due to come on stream in early 2023. Several contracts for similar developments have also been signed. Edison pays the investment and maintenance costs, and the co-owners make their roof space available.

In addition, Edison is involved in the development of agricultural energy communities. Recently, Edison launched AgreGreen di Fondi, in collaboration with Cesab⁽⁷⁾. The aim is to transform a local agricultural area into a laboratory for the energy transition, to be replicated on a national scale.