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Sicily electricity price could be decoupled from Italy if mainland link delayed

02 May 2013 15:24:48 | edem

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The Italian antitrust authority would consider decoupling the Sicilian electricity price zone from the rest of Italy, if regional authorities hold up the building of an interconnector with the mainland that is expected to bring down prices on the island.

Sicilian spot prices could spike if a review, requested by the regional authorities, delays the 380KW Sorgente-Rizzioni electricity cable planned to link Sicily to Calabria, according to antitrust body AGCM.

The antitrust body told ICIS on Thursday that if the Sicilian authorities went ahead with the review and this delayed the project, it would be fair to change Italy's electrical pricing system and disconnect the usually high Sicilian PUN from the national spot price.

That would avoid Italian consumers paying the price for decisions taken by the Sicilian authority, an AGCM spokesman said.

The AGCM sent a letter to the Sicilian assembly warning that delays would cause price spikes in mid-April but has not yet received an answer.

Italian grid operator Terna told ICIS that the project was still on track to be finished by June 2015 as planned, with no decision yet taken on the requested review.

Several environmental committees supported by the Sicilian Regional Assembly have asked the Italian government for clarifications regarding the interconnector project, which alarmed the AGCM.

The Sicilian grid is isolated from southern Italy and faces high peak electricity prices compared with the rest of the country. According to the AGCM, the Sicilian zonal average PUN was 26% higher than the national PUN on the Baseload and 42% on the Peak already last year. The national PUN price would have been €1.8/MWh lower if Sicily had been disconnected, the body said.

High wind and solar power production around 30% of the total capacity installed in Sicily failed to solve security of supply issues, in part because of the difficulty in forecasting output. Lucie Roux

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