The capacity return mechanism is a fundamental tool to guarantee adequacy of the system in a market based exclusively on marginal prices. In fact, this mechanism guarantees long-term price signals that cannot be satisfied by the short-term market alone. This evolution requires development of new return frameworks, also to avoid opportunistic actions, and relative new management platforms.

Storage will have a fundamental role in guaranteeing optimum integration of renewable sources. Current hot topics in terms of impacts on the electricity system and potential innovation include the optimal use of a mix of different technological storage solutions (pumped, electrochemical, compressed air, etc.) and better distinction between utility-scale and distributed solutions. Terna has been studying the field of utility-scale electrochemical storage for years, from its modern laboratories based at the Ciminna (Sicily) and Codrongianos (Sardinia) Plant Units. There, numerous tests have been conducted to identify the potential and margins for improvement of conventional technologies (lithium, ZEBRA and flow batteries) and other types such as supercapacitors. The potential of electromechanical storage will also be investigated by the installation and testing of a flywheel at the Codrongianos laboratory.

Flexibility resources will be increasingly open to contributions from consumers and “prosumers”. The main driver to exploit this potential is technological innovation in the aggregation logic and methods for such resources, with high levels of automation and sustainable costs for users. In this regard, Terna joined with other European TSOs (TenneT, Swissgrid, APG) to found Equigy – a company whose aim is to develop a blockchain technology-based platform to enable multiple small resources to help provide flexibility for the system.

The issue of electric mobility deserves a special mention among distributed resources: with more than six million electric vehicles expected to be in circulation in Italy by 2030, Terna will obviously want to study and analyse a resource that has the potential to deliver significant volumes of flexibility to the grid. This is why initiatives are under way to promote Smart Charging and Vehicle to Grid technologies through extensive involvement and discussion with the main stakeholders in electric mobility. The setting up of the E-Mobility Lab at the AOT in Turin, a centre where the main technologies of the supply chain can be tested, is the cornerstone for the pursuit of these objectives.

The ever-increasing number of distributed resources weighing on the distributors’ grids certainly represents a great opportunity for the system, but it also demands a review of Tern’s grid monitoring and control instruments, since there is currently no way to directly measure what is happening on the medium and low-voltage networks. To this end, Terna is acquiring advanced Artificial Intelligence algorithms that can estimate all of the so-called distributed generation (about one million plants) starting from a small, manageable number of measurements from the field, thereby minimising costs for the system.

There are also margins for improvement of the transmission grid, through optimisation of asset management, e.g. via the spread of technology such as synchronous compensators, reactors, and FACTS, which help increase system flexibility by acting directly on the grid’s technical parameters. These devices are complemented by a capacity for increased accuracy in estimating a line’s effective overload capacity using advanced Dynamic Rating techniques. Terna is involved in the Horizon2020 OSMOSE project. It uses the grid between Puglia and Basilicata for the testing of coordinated management of flexibility resources provided by grid devices, industrial loads and conventional and renewable resources in order to minimise the cutting of renewables through new energy management algorithms.

Good management of the resources of the future is necessary but not enough to enable energy transition: the reform of markets (energy and ancillary services) is another key element that should not be neglected. A market that only remunerates energy cannot guarantee the right price signals to stimulate investment in the new technologies that are needed in order to: enable the enormous potential associated with the flexibility services offered by distributed resources; increase investment in flexible existing production units; and promote the installation of distributed storage systems.

One of the main challenges faced with the current energy transition, as we know, is the combination of exponential growth in the number of parties that actively interact with electricity grids (“prosumers”), with growing variability and unpredictability of the energy exchanges of these parties with grids (both in terms of the characteristic of renewable sources and the gradual adoption of the electricity system for new uses). In order to continue to guarantee high standards of security and quality of service for the Italian electricity system, it will be fundamental to develop new digital technology that allows grid operators to gather information at a low cost (IoT), transfer huge data flows with modern connectivity solutions (fibre optics, 5G, etc.) and low latency, and to process and manage the relative big data with appropriate systems and tools, such as artificial intelligence.