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Reference Scenario

Year 2009Year 2008% change
$/bbl Brent Dated price61.5196.99-36.50%
$/ exchange rate1.391.47-5.40%
/bbl Brend Dated price44.2565.03-32.00%

As regards the energy commodity, the price of Brent crude oil (ARA Spot Average), which has a significant impact on the unit cost of liquid and gas fuel on domestic market, recorded average values lower than those recorded in 2008, from 96.99 dollars per barrel, to 61.51 dollars per barrel, with a peak of 76.66 dollars per barrel in November 2009.

 
Crude Oil Price

As regards electricity, in 2009 the average exchange sales price (PUN) was equal to Euro 63.72 per MWh, down by 26.8% compared to Euro 86.99 per MWh in 2008. The drop in PUN was Euro 31.33 per MWh in peak hours, equal to Euro 83.05 per MWh and lower than Euro 20 per MWh in off-peak hours. Price trend was characterized by a negative differential between 2008 and 2009, a gap that rapidly widened since March. This trend is due to both the rapid increase in fuel price, which characterized the entire 2009, and the strong reduction in demand for electricity as a result of recession. It is interesting to note that sales price shrinkage in electricity was however higher than the reduction in fuel costs; this is a sign of a higher competition and a lower market concentration.

 

In 2009, in fact, new production plants, for around 6,000 MW, were completed, compared to a continuously decreasing usage rate of the installed park due to the drop in demand. The slight spark spread recorded, is actually starting to adversely affect the situation of plants, even modern plants.

 
PUN

With regard to gas, the Italian market, which in 2009 envisaged a supply excess due to the coming into operation of new infrastructures during the year (Gas Naturale Liquefatto of Rovigo, 2 step of Trans Austria Gasleitung and of Trans Tunisian Pipeline Company) had to tackle a severe reduction in consumption, which fell to 78 billion cubic metres by effect of the strong shrinkage recorded in the industrial and thermo-electric sectors.

The major European and Italian operators, which signed long-term agreements with producers, were partly subjected to Take or Pay penalties and are now re-negotiating their contract terms as regards both flexibility and price. The widespread gas surpluses throughout Europe have obviously triggered a fall in prices and the increase in volumes trades on Spot markets.

Within this context, the average value of the energy rate (QE) in 2009 (calculated referring to the Italian Authority for Electricity and Natural Gas, AEEG, resolutions no. 134/06 and 192/08), was Euro 24.97 cents per cubic meter, compared to an average value of Euro 28.42 cents per cubic meter in 2008 and an expected value of Euro 23.46 cents per meter for 2010. As can be inferred from these data, the oil price fall recorded during the second half of 2008, mainly affected gas prices during 2009. This is naturally due to the effect of the delays associated with the formulas for updating gas prices.

 

The opening of the Gas Stock Exchange is expected for 2010, although various aspects related to the scarce efficiency of the measuring/calculation of consumption and the reduced storage availability are still unsolved. The chance for Italy to become a hub for gas, as expected by many people, is likely to be jeopardised and/or delayed.

 
Gas price
 
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