Italy is one of the worlds largest economies and a founding member of both the European Union and the North Atlantic Treaty Organization. Italy relies on imports for almost all of its oil needs. Natural gas consumption has grown rapidly in Italy in the past decade. The last coal mine in Italy closed in 2001. Italy has faced chronic blackouts during peak electricity usage, due to shortage of domestic generation capacity. Italy does not generate electricity using Nuclear energy and actually imports it from Slovenian nuclear power plant. To overcome these deficiencies Italy is looking for alternative viable fuel replacements. As Italy is well endowed with renewable energy resources, such as solar, biomass and geothermal energies, which can very well be captured and utilized for Generating Power. Italy as a signatory of Kyoto Protocol must reduce its Carbon-dioxide emissions by 6.5 Percent below the 1990 levels before 2012, but struggles hard with 20 percent above the target.
In 2005, Italys nominal gross domestic product (GDP) was $1.7 trillion, the fourth-largest in Europe and the tenth-largest in the world. In recent years, however, the performance of Italys economy has lagged the rest of the Eurozone countries. In 2004 and 2005, Italy experienced real GDP growth of 1.0 and 0.1 percent, respectively, compared to 1.8 and 1.4 percent for the Eurozone as a whole. Analysts predict that the Italian economy will grow by 1.0 percent in 2006, still well below the Eurozone average. The sluggish performance of the Italian economy has led to a deterioration of the countrys public finances, with Italys fiscal deficit again breeching the 3.0 percent cap imposed by the EU Growth and Stability Pact. With limited domestic energy sources, Italy is highly dependent on imports to meet its consumption needs. In absolute terms, oil consumption has remained relatively static since 1970, but oils share of Italys primary energy mix has decreased significantly, steadily replaced by natural gas. A pressing issue affecting Italy has been the countrys electricity supply. In the summer of 2003, increased electricity demand during a heat wave overwhelmed Italys electricity generation facilities, resulting in rolling blackouts. In September 2003, Italy suffered a nationwide blackout after a storm damaged a transmission line in Switzerland carrying electricity from France. Over the past decade, Italys installed electricity generation has not been able to keep up with demand, resulting in an increased share of electricity imports as a percent of total consumption.