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October 2020

22October 2020 Monthly Report on the Electricity System

October 2020

3

page 13

page 16

page 24

page 5

This month, we present a selection of ARERA resolutions

relevant for dispatching and transmission activities.

October 2020 Monthly Report on the Electricity System

October 2020

In October 2020, 47% of the electricity demand was met via

production from Non-Renewable Energy Sources, 37% from

Renewable Energy Sources and the remainder via foreign

exchange.

In October, production from Renewable Energy Sources

increased (+28.8%) compared to the same month of the

previous year. Specifically, there was an increase in

renewable hydroelectric production (+52.1%), wind

production (+56.6%) and photovoltaic production (+9.8%)

compared to the previous year.

In October 2020, electricity demand was 26,196 GWh, in line

with the same month of the previous year (-0.8%). In

particular, a reduction in thermoelectric production was

recorded (-16.9%), together with an increase in hydroelectric

(+48.9%) and wind production (+56.6%), compared to the

same month of the previous year. In 2020, cumulative

demand (251,290 GWh) fell (-6.2%) compared to 2019.

The October 2020 result was achieved with one less working

day (22 vs 23), and with an average monthly temperature

lower by as much as 2.5°C compared to October last year.

When adjusted for seasonal, temperature and calendar

effects, the figure represents a -0.6% variation.

The October total for withdrawal programmes on the DAM

was approximately € 1.1 Bn, down 13% compared to the

previous month and 22% compared to October 2019.

In October, the spread between average bid-up and bid-down

prices on the DSM was € 101/MWh, up 27% compared to the

previous month and 9% compared to October 2019. Total

volumes decreased compared to the previous month (-14%).

In October, the spread between bid-up and bid-down prices

was € 131/MWh, up compared both to the previous month (€

89/MWh; 46%) and, to a lesser extent, to October 2019 (€

122/MWh; 7%). Total volumes increased compared to the

previous month (+8%).

44October 2020 Monthly Report on the Electricity System

October 2020

5

Monthly Summary and Short-Term Analysis

Demand breakdown – coverage by sources

Source: Terna

(1) Electricity Demand = Production + Foreign Balance - Pumping Consumption

(2) Pumping production is calculated assuming theoretical efficiency during the pumping phase

(3) RES Production = Hydro - Pumping production + Biomass + Geothermal + Wind + Photovoltaic

Demand – seasonality adjusted

Source: Terna


In October 2020, electricity demand was 26,196 GWh, in line with the same month of the

previous year (-0.8%). In particular, a reduction in thermoelectric production was recorded

(-16.9%), together with an increase in hydroelectric (+48.9%) and wind production (+56.6%),

compared to the same month of the previous year.

In 2020, cumulative demand (251,290 GWh) fell (-6.2%) compared to 2019.

In October 2020 there was

a slight reduction in

geothermal production

(-1.0%) and increases in

photovoltaic production

(+9.8%) and in the foreign

balance (+12.0%).

In 2020, a +37.9% increase

in exports was recorded

compared to the previous

year.

In October the trend of net

total production recorded

-2.8% compared to the

same month of 2019.

The value, adjusted for

seasonal, calendar and

temperature effects,

shows a positive change

of +0.4%.

The October 2020 result was achieved with one less working day (22 vs 23), and with an

average monthly temperature lower by as much as 2.5°C compared to October last year.

When adjusted for seasonal, temperature and calendar effects, the figure represents a -0.6%

variation.

The first ten months of 2020 decreased by 6.2% compared to the same period in 2019.

In adjusted terms, this variation does not change.

In annual terms, the data for October 2020, adjusted for seasonal, calendar and temperature

effects, recorded a slight increase in electricity demand: +0.4% compared to the previous

month. Considering this result, the trend remains stable.

6

IMCEI

Monthly Industrial Electrical Consumption Index - IMCEI (2015 base = 100)

Source: Terna

IMCEI short-term analysis (base 2015 = 100)

Source: Terna


The annual change of October 2020 (compared to October 2019) was a drop of 0.7% with

raw data. When adjusted for seasonal, temperature and calendar effects, this decrease

was -1.0%.

In the first ten months of 2020, the change in withdrawals by HV customers was -10%; with

data adjusted for seasonal and calendar effects the change comes to -8.9%.

In October, the change in the

monthly index of Italian

electricity consumption was

a drop of 0.7% compared to

October 2019.

When adjusted for seasonal,

temperature and calendar

effects, the monthly figure

for October 2020 was an

increase of 1.3% compared

to the previous month.

7

Energy Demand Mix

Demand breakdown – coverage by sources

Source: Terna

Trend of 2020 energy demand mix compared to 2019

Source: Terna


In October 2020, 47% of the electricity demand was met via production from

Non-Renewable Energy Sources, 37% from Renewable Energy Sources and the

remainder from the foreign balance.

In 2020, electricity demand was 251,290 GWh, 51% of which was met via production from

Non-Renewable Energy Sources, 39% from Renewable Energy Sources and the

remainder from the foreign balance.

In 2020, the demand for

electricity from the grid saw

a decrease of -6.2%

compared to 2019.

In 2020, energy production

from renewable sources

totalled 98.2 TWh, a +5.0%

increase compared to 2019.

In 2020, production from

Non-Renewable Energy

Sources recorded a

percentage decrease of

-10.2% compared to 2019.

In October, production from

Renewable Energy Sources

increased sharply (+28.8%)

compared to the same month

of 2019.

8

Details of Renewable Energy Sources

RES Production - Breakdown

Source: Terna

Trend of 2020 RES net production compared to 2019

Source: Terna


In October, production from Renewable Energy Sources increased (+28.8%) compared to

the same month of the previous year. Specifically, there was an increase in renewable

hydroelectric production (+52.1%), wind production (+56.6%) and photovoltaic production

(+9.8%) compared to the previous year.

In 2020, production from

renewable energy sources

increased by +5.0%

mainly due to an increase

in photovoltaic production

(+9.5%) and renewable

hydroelectric production

(+7.3%).

In 2020, 42.9% of net

national production was

from Renewable Energy

Sources.

In October 2020,

renewable production

represented 43.5% of total

net national production,

an increase compared to

the same month in 2019

(32.8%).

In October 2020, the

detailed breakdown of

production from

renewable energy sources

recorded a M-o-M

percentage increase

(+2.0%).

9

Historical Energy Balance Sheets

2020 Historical Monthly Energy Balance Sheet

Source: Terna

2019 Historical Monthly Energy Balance Sheet

Source: Terna

(1) Electricity Demand = Production + Foreign Balance - Pumping Consumption

(2) Pumping production is calculated assuming theoretical efficiency during the pumping phase

(3) RES Production = Hydro - Pumping production + Biomass + Geothermal + Wind + Photovoltaic


In 2020, total net production allocated for consumption (226,583 GWh) met 90.2% of

national electricity demand (251,290 GWh).

In 2020, net total

production was down

(-4.1%) compared to 2019,

and peak electricity

demand was reached in

July, with 28,908 GWh.

The developments in the monthly balance sheet for 2019 are provided below.

In 2019, the month with

the highest demand for

electricity was July, with

30,964 GWh.

Demand by Operational Area

Demand by Operational Area

Source: Terna

10

Source: Terna

Demand by Operational Area – Map Chart

[GWh]

The regions are combined in clusters

on the basis of production and

consumption:

• TURIN: Piedmont - Liguria -

Valle d’Aosta

• MILAN: Lombardy (*)

• VENICE: Friuli Venezia Giulia -

Greater Venice - Trentino Alto

Adige

• FLORENCE: Emilia Romagna

(*) - Tuscany

• ROME: Lazio - Umbria -

Abruzzo - Molise - Marche

• NAPLES: Campania - Apulia -

Basilicata - Calabria

• PALERMO: Sicily

• CAGLIARI: Sardinia

(*) In these two regions, the geographical borders do not correspond to the electrical borders. Lombardy includes production

plants that are part of the geographical administrative territory of Emilia Romagna.


In October 2020, there was a decrease in demand in the Northern zone (TO-MI-VE) and

on the Islands (CA-PA), in line with the Centre (RM-FI) and the South (NA) compared to

the corresponding period of the previous year.

In 2020, the Y-o-Y

percentage change in

demand is -7.4% in the

Northern zone, -5.9% in

the Centre, -3.9% in the

South and -5.1% for the

Islands.

Source: Terna

11

Peak Demand

Peak Demand

Source: Terna


Maximum peak

Coverage of demand - 22 October 2019 9:00-10:00

At its peak, production from

renewable sources

contributed to covering 30%

of demand, with thermal

production covering 53%

and the remainder covered

by the foreign balance.

At peak, the contribution from

thermal production was

24,847 MW, sharply down by

-23.6% compared to the

contribution from thermal

production at the October

2019 peak (32,518 MW).

In October 2020, peak demand was recorded on Thursday 22 October between 9:00 and

10:00 and was 46,974 MW (-0.7% Y-o-Y). The hourly demand diagram of the peak day is

presented below.

12

Net Foreign Exchange – October 2020

Net Foreign Exchange on the Northern border

Source: Terna

Balance of Physical Exchanges – Annual Cumulative Figure

Balance of physical electricity exchanges: map

Source: Terna


In 2020, a net exchange

was recorded from the

Northern zone to Emilia

Romagna and Tuscany of

11.0 TWh. The Continent

recorded a net exchange

towards Sicily of 2.7 TWh.

In October we can note a good saturation on the Northern frontier mainly in the second half

of the month.

In October 2020, there

were imports of 4,306

GWh and exports of 175

GWh.

The balance of physical electricity exchanges mainly shows the energy flows among the

various areas identified in the Italian electricity system.

The 380 kV connection between Sicily and the Mainland ensures secure management of the

electricity system in Sicily and Calabria.

13

[MW]

Pinst ≤1500

1500< Pinst≤ 2500

2500< Pinst≤ 3500

3500< Pinst≤ 4500

Pinst> 4500

[MW]

Pinst≤ 150

150< Pinst≤ 1000

1000< Pinst≤ 2000

2000< Pinst≤ 3000

Pinst> 3000


Source: Terna

Source: Terna

Photovoltaic Production and Capacity

Wind Production and Capacity

Production and Installed Capacity

Production from

photovoltaic sources

down -22.2% compared to

the previous month.

Energy produced by photovoltaic sources in October 2020 was 1,831 GWh, down on the

previous month by 522 GWh. The annual cumulative figure increased compared to the

previous year (+9.5%).

Energy produced from wind sources in October 2020 was 1,605 GWh, up compared to the

previous month by 255 GWh. The annual cumulative figure is in line with the previous year

(+0.3%).

Production from wind

sources was up compared

to the previous month by

+18.9%.

14

[MW]

Pinst ≤1000

1000< Pinst≤ 2000

2000< Pinst≤3000

Pinst> 3000

Source: Terna

Source: Terna

Hydroelectric Production and Capacity

Hydroelectric Producibility and Reservoir Percentage


In October, hydroelectric producibility increased compared to the previous month.

In October 2020,

considering Italy as a

whole, the current

reservoir percentage

compared to the

maximum reservoir

capacity was 55.9%, an

increase compared to the

same month in 2019

(53.6%).

Energy produced by hydroelectric sources (e.g. reservoirs, storage and run-of-river) in

October 2020 was 4,478 GWh, up compared to the previous month by 432 GWh. The

annual cumulative figure increased (+7.2%) compared to the previous year.

Production from

hydroelectric sources up


month (+10.7%).

15

[MW]

Pinst = 0

0 < Pinst ≤ 500

500 < Pinst≤ 1000

[MW]

Pinst ≤ 5000

5000< Pinst≤ 10000

10000< Pinst≤ 15000

15000< Pinst≤ 20000

Pinst> 20000

Source: Terna

Source: Terna

Geothermal Production and Capacity

Thermal Production and Capacity


Thermal production

increased (+5.1%)


month.

Energy produced by thermal sources in October 2020 was 477 GWh, up compared to the

previous month by 23 GWh. The annual cumulative figure was down (-1.1%) compared to

the previous year.

Thermal production was

down (-15.2%) compared

to the previous month.

Energy produced by thermal sources in October 2020 was 13,951 GWh, sharply down

from the previous month by 2,507 GWh. The annual cumulative figure was down (-9.2%)

compared to the previous year.

16

[€/MWh]

Day-Ahead Market


Day Ahead Market – amounts and volumes

Source: Terna calculation on GME data


Spread compared to the SNP

[€ Bn] [GWh]

The October total for withdrawal programmes on the DAM was approximately € 1.1 Bn,

down 13% compared to the previous month and 22% compared to October 2019.

The increase compared to September is due to growth in both the average Single National

Price (hereinafter SNP) and demand, while the decrease over the previous year is due to a

drop in the average SNP from € 52.8/MWh in October 2019 to € 43.6/MWh in October

2020.

Total amount in October

2020 down 22% compared

to October 2019

In October, the zonal prices were basically in line with the SNP, with the exception of the

Sicily zone, which recorded a spread of +€9.1/MWh.

Compared to October 2019, the prices of the Sicily zone recorded an average decrease of

€ 14/MWh, while for the other zones there was an average reduction of € 7.6/MWh.

October 2020 zonal prices

in line with the SNP for all

zones except Sicily

-700

0

700

1.400

2.100

-5

0

5

10

15

France Austria Slovenia Switzerland Greece Montenegro

[GWh][€/MWh]

DAM programme (RH) Price spread (LH)

17

Day Ahead Market – SNP and zonal prices [€/MWh]


Price spread with foreign exchanges and day ahead programmes

Source: Terna calculation

€/MWh PUN North Centre-North Centre-South South Sicily Sardinia

Average 43.6 42 42.5 44.9 44.9 52.7 45.3

Y-o-Y -9.3 -10.1 -9.4 -6.5 -6.1 -14 -6.1

∆ vs SNP - -1.6 -1.1 1.3 1.3 9.1 1.8

∆ vs SNP 2019 - -0.7 -1 -1.4 -1.8 13.9 -1.4

Peak 50.7 50.5 51.4 49 49 57 50.5

Off Peak 39.6 37.3 37.6 42.7 42.7 50.3 42.5

∆ Peak vs Off Peak 11.1 13.2 13.8 6.3 6.3 6.6 8.0

Minimum 4.9 4.9 4.9 4.9 4.9 4.9 0

Maximum 78.7 78.7 81.6 81.6 81.6 114.1 449

* In October the South-Greece transit limit was 0 MW

**No spread is represented for Montenegro because there is no power exchange


In October, the spread between the peak and off-peak prices was €13.2/MWh for the Sicily

zone, €13.8/MWh for the Northern zone and €6.8/MWh on average for the remaining

zones.

In September, the spread between the peak and off-peak prices was €10/MWh for the

Sicily zone, €11.4/MWh for the Southern zone and €13.8/MWh on average for the

remaining zones.

.

Peak-off peak spread up


month across all zones

except Centre-North

Net imports on the

Northern border of 4.1 TWh

October saw an increase in the price spread on all borders compared with the previous

month.

Imports totalled 4.3 TWh, with Montenegro and Switzerland accounting for 28% and 47%

of the total respectively. Total exports were 0.07 TWh, with Switzerland accounting for

46% and France 37%.

* **

18

[€/MWh] [GWh]

[€/MWh] [GWh]

Ex-ante Ancillary Services Market

Ex-ante Ancillary Services - prices and volumes

Source: Terna

Source: Terna

Ex-ante Ancillary Services - prices and volumes by market zone


In October, the spread between average bid-up and bid-down prices was €101/MWh, up

27% compared to the previous month and up 9% compared to October 2019.

The total volumes fell compared to the previous month (-14%), in particular upward volumes

decreased by 21% and downward volumes remained stable.

The upward volumes decreased by 7% and downward volumes by 12% compared to the

same month of the previous year.

Average bid-up price in

October 2020 of €123/MWh

Average bid-down price in


The market zone featuring the highest spread (€203/MWh) is the Centre-South, as in the

previous month.

This spread recorded a 43% increase compared to the previous month, due to an increase

in the average bid-up price of 34% (from €169/MWh in September to €226/MWh in

October) and to a reduction in the average bid-down price of 16% (from €27/MWh in

September to €23/MWh in October).

Centre-South: zone with

the highest price spread

North: zone with the most

volumes moved

19

[€/MWh] [GWh]

[€/MWh] [GWh]

Balancing Market

Source: Terna

Source: Terna

Balancing market – prices and volumes

Balancing market – prices and volumes by market zone


In October, the spread between bid-up and bid-down prices was € 131/MWh, up compared

both to the previous month (€ 89/MWh; 46%) and, to a lesser extent, to October 2019

(€ 122/MWh; 7%).

Total volumes increased compared to the previous month (+8%), in particular, upward

volumes increased by 54% and downward volumes fell by 7%. Compared to October 2019,

upward volumes increased by 42% and downward volumes fell by 21%.

Average bid-up price in


Average bid-down price in


The market zone featuring the highest spread (€ 316/MWh) was the Centre-South, in line

with the previous month (spread of € 264/MWh).

In October, the North zone was confirmed as the area with the highest volumes (466 GWh

downward and 193 GWh upward).

The price spread increased across all zones, with the exclusion of Sardinia and

Centre-North where instead it decreased. The zone with the greatest change in spread

compared to the previous month is the South (+€30/MWh; +49%)

Centre-South: zone

featuring the highest price

spread

North: zone with the most

volumes moved

20

Commodities – Spot Market

Spot electricity prices

Source: Terna calculation on GME, EPEX data


In October 2020, Brent prices decreased compared to September, coming out at $40.4/bbl (-1.7%).

Coal prices (AP12) stood at $56.9/t, an increase compared to the previous month (+8.7%).

Gas prices in Europe increased in October up to a monthly average of € 13.9/MWh (+24.1% compared to the

previous month); the PSV also recorded an increase and came out at €13.6/MWh (+16.2%).

Electricity prices in Italy fell in October compared to the previous month, with a monthly average of € 48.7/MWh

(-11.1%). The French power exchange also saw an increase, with the price of electricity at € 37.1/MWh

(-21.1%); as did the German exchange, with € 33.2/MWh (-23.4%) compared to September.

-40

-20

0

20

40

60

80

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct

[€/MWh]

Germany France Italy

21

Source: Terna calculation on Bloomberg data

Gas & Oil spot prices

Coal & Carbon spot prices Coal & Carbon spot prices



Clean Dark & Spark spreads Italy


Monthly average change

PSV-TTF = €0.3/MWh


API2-API4 = -$3.0/t

Clean spark spread PSV

monthly average =

+€6.9/MWh

Clean dark spread API2

monthly average =

+€3.6/MWh

10

20

30

40

50

60

70

80

0

5

10

15

20

25

30

35


[$/bbl][€/MWh]

TTF (lh) PSV (lh) BRENT (rh)

0

5

10

15

20

25

30

35

30

40

50

60

70

80

90

100


[€/t][$/t]

API 2 (lh) API 4 (lh) CO2 (rh)

-30

-20

-10

0

10

20

30

40


[€/MWh]

Clean Spark (PSV) Clean Dark (API2)

22

Commodities – Forward Market

Forward Electricity Prices – Year+1



In October 2020, the forward prices of Brent came out at around $41.4/bbl, down compared to $42.4/bbl in

September (-2.4%).

The average forward prices of coal (API2) were up compared to September, at around $57 (+3.1%).

The average forward prices of gas in Italy (PSV) decreased compared to the previous month, coming out at

around € 14.5/MWh, while forward prices of gas in Europe (TTF) increased and came out at € 14/MWh

(+3.2%).

The average forward prices of electricity in Italy came out at around €49.3/MWh, down compared to the

previous month (-1.8%). There was also a downward trend on the French power exchange, where the price

came out at around € 44.2/MWh (-7.3%); as is the case in Germany, where the price was € 39.8/MWh

(-4.3%).

30

35

40

45

50

55

60

65

70


[€/MWh]

Germany France Italy

23

Clean Year+1 Forward Dark & Spark spreads Italy

Year+1 Forward Gas & Oil Prices

Year+1 Forward Coal & Carbon Prices






PSV-TTF = +€0.6/MWh


API2-API4 = -$5.1/t

Clean spark spread PSV

monthly average = +€11/MWh

Clean dark spread API2

monthly average =

+€9.4/MWh

20

30

40

50

60

70

10

15

20

25

30


[$/bbl][€/MWh]

TTF (lh) PSV (lh) BRENT (rh)

10

15

20

25

30

35

40

50

60

70

80

90


[€/t][$/t]

API 2 (lh) API 4 (lh) CO2 (rh)

5

10

15

20


[€/MWh]

Clean Spark (PSV) Clean Dark (API2)

24

Below is a selection of ARERA provisions of major interest for dispatching and transmission

activities in October 2020. This selection is not exhaustive with respect to the regulatory framework.

Launch of proceeding for the adoption of measures on methods and criteria for determining

and updating the Weighted Average Cost of invested Capital (WACC) in the electricity and

gas sectors for the second regulatory period

The Authority launched the proceeding for the redetermination, from 1 January 2022, of the WACC

recognised for the regulated infrastructural services of the electricity and gas sectors. The resolution

identifies the general criteria that ARERA intends to adopt for the purposes of updating the WACC,

which will then be detailed in the context of a subsequent consultation stage. The proceeding also

provides for the possibility that specific auditions will be held and data collected/information

requested from operators. The term for the conclusion of the proceeding was set for the end of

2021.

Approval of the agreement on the shipping service related to the single intraday coupling

under the terms of article 68 paragraph 6 of Regulation (EU) 2015/1222 (CACM)

In coordination with the other European Regulatory Authorities, the Authority approved the

agreement on the transit shipping service, that is on the service of transfer of the physical and

financial items between offer zones of origin and destination of energy exchanges made in the

context of the single intraday coupling pursuant to the SIDC (Single IntraDay Coupling) Project.

Decisions on essential plants. Amendments and supplements to the reference regulation

The Authority amended/supplemented the regulation for essential plants for system security

contained in resolution 111/06. Specifically, for the 2021 calendar year, the Authority determined the

values of bonuses in order to apply the alternative remuneration regulation to typical systems and

also updated the calculation criteria of the fees for the same year for typical systems. In addition,

the Authority reprogrammed the deadlines laid down for the coming activities associated with the

definition of the list of essential plants.

Approval of an inspection in relation to the electricity transmission company on the subject

of service quality

The Authority approved an inspection of Terna, to be performed by 31 December 2020, to ascertain

the correct application of the obligations to record outages and of calculating the energy-not-

supplied indicators, communicated to the Authority in 2020.


Resolution 380/2020/R/COM

Resolution 382/2020/R/eel



https://www.arera.it/it/docs/20/380-20.htmhttps://www.arera.it/it/docs/20/382-20.htmhttps://www.arera.it/it/docs/20/428-20.htmhttps://www.arera.it/it/docs/20/405-20.htm

25

API2 – CIF ARA: the reference index for the coal price (with PCI of 6, 000 kcal/kg) imported from north-west

Europe. It is determined on the basis of an assessment on the CIF (Cost, Insurance and Freight) prices of coal

contracts, with delivery to the ports of Amsterdam – Rotterdam – Antwerp (ARA).

API4 – FOB Richards Bay: the reference index for the coal price (with PCI of 6,000 kcal/kg) exported from

Richards Bay in South Africa. It is calculated on the basis of an assessment on the FOB (Free On Board) prices

of contracts excluding transport starting from the port of Richards Bay.

Territorial Areas: these consist of one or more adjacent regions and are aggregated as indicated:TURIN: Piedmont - Liguria - Valle d’AostaMILAN: Lombardy (*);VENICE: Friuli Venezia Giulia - Veneto - Trentino Alto AdigeFLORENCE: Emilia Romagna (*) - Tuscany;ROME: Lazio - Umbria - Abruzzo - Molise - MarcheNAPLES: Campania - Apulia - Basilicata - Calabria;PALERMO: SicilyCAGLIARI: Sardinia

(*) In these two regions, the geographical borders do not correspond to the electrical borders. Lombardy

includes production plants that are part of the geographical administrative territory of Emilia Romagna.

The data related to the reservoirs table of tanks are aggregated by ZONE as indicated:NORTH - includes the Territorial Areas TURIN, MILAN and VENICE;CENTRE and SOUTH – includes the Territorial Areas FLORENCE, ROME and NAPLES;ISLANDS – includes the Territorial Areas PALERMO and CAGLIARI;

Brent: the oil price as global reference for the crude oil market. Brent Crude is the result of a mixture deriving

from the union of different types of oil extracted from the North Sea.

Clean Dark Spread: the difference between the price of electricity and the cost of the fuel of a coal power

station and the cost of the CO2 emission quotas.

Clean Spark Spread: the difference between the price of electricity and the cost of the fuel of a gas power

station and the cost of the CO2 emission quotas.

Dirty Dark Spread: the difference between the price of electricity and the cost of the fuel of a coal power

station.

Dirty Spark Spread: the difference between the price of electricity and the cost of the fuel of a gas power

station.

Day-Ahead Market (DAM): the trading venue of offers to buy and sell electricity for each relevant period of the

day after that of trading.

Balancing Market (MB): the set of activities performed by the Operator for selecting the offers presented on

the Dispatching Services Market to resolve the congestions and establish secondary and tertiary reserve power

margins, carried out on the same day as that to which the offers refer.

Dispatching Services Market (MSD): the trading venue of the resources for the dispatching service.

Dispatching Services Market - planning stage (Ex-ante Ancillary Services Market): the set of activities

performed by the Operator for selecting the offers presented on the Dispatching Services Market to resolve the

congestions and establish secondary and tertiary reserve power margins, carried out in advance with respect to

real time.

Key


26

M-o-M - Month on Month: percentage change of the difference between the reference month and the previous

month

NET TRANSFER CAPACITY - NTC: the maximum transfer capacity of the grid for interconnection with other

countries. NTC D-2 indicates the same capacity defined in day D-2.

Peak hours: these, according to the agreement with the electricity market operator (Gestore del Mercato

Elettrico - GME), are the hours between 8:00 and 20:00 of working days only. Off-peak hours are all hours that

are outside of peak hours.

CO2 Price: determined by the European Union Emissions Trading Scheme (EU ETS), a system for the trading

of greenhouse gas emission quotas in Europe aimed at reducing emissions.

Single National Price - SNP: the Single National Price calculated as a result of the Day-Ahead Market (DAM).

DAM Zonal Price: the balanced price of each zone calculated as a result of the Day-Ahead Market (DAM).

PSV - Punto Scambio Virtuale: the price at the virtual exchange point for the buying and selling of natural gas

in Italy.

TTF - Title Transfer Facility: the price at the virtual exchange point for the buying and selling of natural gas in

the Netherlands.

Y-o-Y – Year on Year: percentage change of the difference between the period of the current year and the

same period of the previous year

IMCEI - Monthly Industrial Electrical Consumption Index: The monthly IMCEI index was constructed based

on the size of the monthly withdrawals of the approximately 530 customers directly connected to the high

voltage grid and for which Terna is responsible. These customers have been reclassified pursuant to the

Ateco2007 Codes and aggregated by electrically relevant product class. The adimensional index has been

created taking 2015 as a basis 100.


27

Disclaimer

1. The monthly electricity reports for 2019 are definitive, while those for 2020 are provisional.

2. More specifically, the monthly electricity reports for 2020 – prepared at the end of each month using the

operating archives – are subject to further and precise verification or recalculation in the following months

based on additional information. This operation to refine the monthly figures translates, for the reporting

data, into a higher degree of precision compared to the sum of the data processed in the single Monthly

Reports published on the website www.terna.it.

http://www.terna.it/en

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