Electricity transmission

Terna's main business is the transmission of electricity in Italy.

The Italian electricity system consists of four components: the production, transmission, distribution, and sale of electricity.

In this process, Terna is engaged in managing the electricity system by operating the high voltage grid, maintaining infrastructures, and developing the grid (planning and construction).

Electricity transmission

The main stages of the transmission service are as follows:

Operation

In grid operation, it is essential to ensure a balance of deliveries and withdrawals at all times, i.e. between the supply of energy, produced domestically and imported, and consumption by end users. This function is called dispatching.

Preparation for real-time operation includes planning unavailability (of the grid and production plants) with different time horizons, a forecast of the national electricity requirements, comparison to see if it is consistent with the production plan determined by the outcome of the free power market (Electricity Exchange and off-Exchange contracts), acquisition of resources for dispatching, and checks on power transits for all transmission grid lines.

During the real time control stage, the National Control Centre, coordinating other centres around the country, monitors the electricity system and carries out dispatching, intervening where differences are seen in the expected structure owing to production plant or grid element failures or owing to a trend in demand that differs from forecasts, with commands to producers and remote operation centres, in order to modulate the supply and the grid structure. To avoid the risk of grid degeneration and extensive power outages, it may intervene in an emergency, also to reduce the demand.

Grid development planning

The analysis of electricity flows on the grid and the development of projections of demand enable Terna to identify critical aspects of the grid and new works that need to be constructed in order to ensure system adequacy in terms of meeting requirements, secure operations, reduced congestion, and improving service quality and continuity.

Works to be constructed are detailed in the National Transmission Grid Development Plan, which is presented to the Ministry for Economic Development every year for approval. Terna then follows the authorizationprocess, from advance consultation with local governments all the way through to the authorization for construction.

Finally, by analyzing the situation of the grid, Terna identifies the best ways to connect plants to the grid for all operators that make such a request.

Construction

Terna establishes the engineeringstandards of the plants, in particular the construction standards, and the performance required from equipment, machinery, and components of stations and electricity lines.

As far as plant construction is concerned, Terna prepares projects for the works authorized. In particular, it establishes the requirements of external resources and project budgets, as well as working methods and technical specifications for the components and materials that will be used in constructing the new lines or stations, including the adoption of innovative methods. The construction of new plants is normally outsourced.

Maintenance

Terna carries out the maintenance of its power lines and stations through eight Transmission Operating Areas, which employ most (slightly less than 70%) of the Company’s human resources.