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Electricity and gas distribution: differences

Electricity and gas distribution: differences

It is necessary to know which are the channels through which gas and electricity are produced, sold and distributed to users; only in this way is it possible to understand the specificities of these supply chains and understand that the cost of electricity is closely related to the cost of gas, and the availability of one is bound to the availability of the other.

The issues of energy supply and the cost of energy are, today, more significant than ever at a national and global level. The general increase in energy prices - due to the international situation, but not only - is leading more and more citizens to seek effective solutions to reduce energy consumption and thus save not only resources, but also money.

Expenditure on heating is one of the items that have the most significant impact on household and business expenses, and this is why more and more consumers are wondering whether it is more convenient to have gas or electric heating systems, whether the choice of an electric heating system can protect them from the risks associated with a possible international shortage of natural gas and - in general - what are the best choices to counter the increase in the cost of gas and electricity.

To answer these questions, it is essential to know what are the channels through which gas and electricity are produced, sold and distributed to users; only in this way is it possible to understand the specificities of these supply chains which, being of public interest, are subject to particular rules, necessary to protect consumers and society as a whole.

The electricity supply chain

The electricity that is used in our homes and industries is generally produced by generators that transform mechanical, thermal or chemical energy into electricity. This energy, usually produced in thermoelectric and hydroelectric plants that are scattered throughout the Italian territory, is conveyed to the national distribution network through special lines that connect the production plants with the primary stations (the so-called "primary network"); the primary stations are then connected to the medium and low voltage distribution networks (“secondary networks”) and, therefore, to the consumer.

The electricity supply chain is based on the presence of a capillary network that collects all the electricity produced by the power plants and distributes it to users, according to need, taking care to maintain a constant balance between the quantity of energy fed into the network and that collected by consumers and also coping with the peaks in demand that physiologically occur at certain times of the day and at certain times of the year.

To do this, the electricity supply chain cannot limit itself to producing energy, transporting it, distributing it and selling it, but must (or should) also identify solutions for its storage and conservation, in order to have a "reserve energy ”to be used when the demand from users is greater. Renewable sources, which play an important role in this area, cannot be the solution to this problem, since their main characteristic is that they are available in an inconsistent manner over time (they are defined as "non-programmable"): being able to store the energy produced by renewable sources at peak times of production is increasingly important in order to guarantee the stability of the distribution system as a whole and the so-called "energy transition". Therefore, renewables currently make an important contribution to the production of electricity (in particular wind and photovoltaic), but only when they are available simultaneously with the demand for energy. It is for this reason that in Italy the production of electricity from renewable sources is covered for only 25% by renewables, while the rest of the production is entrusted to traditional power plants, fueled by methane gas (and in some cases still by coal), which therefore can immediately satisfy the peak demands from the network.

The gas distribution chain

If electricity is produced in special power plants that transform mechanical, thermal or chemical energy into electricity, there are very different ways of producing natural gas, which is normally found in underground or submarine fields, just like oil.

These deposits, formed in prehistoric times, are obviously not uniformly distributed over the entire planet, but supply almost all of the gas that is used globally; the gas supply chain must therefore necessarily include a gas search and extraction system, but also a transport system capable of delivering this energy source to the end user.

To obtain this result, natural gas is first extracted and subsequently compressed and sent to high-pressure gas pipelines, or liquefied through a cooling and condensation process, which significantly reduces its volume (1 cubic meter of liquid gas corresponds to about 600 cubic meters of natural gas in gaseous form). The compressed gas is injected into the various high-pressure gas pipelines that transport it, also crossing various countries up to the local distribution networks, in special low-pressure reduction stations, while the liquefied gas can be transported by means of special tanks (LNG carriers). Liquefied natural gas (LNG) is subjected to the regasification process to be brought back to the gaseous state and then distributed in a capillary way to users, just like electricity: if, however, electricity is transported through high-speed cables. high, medium and low voltage, the gas circulates in high, medium and low pressure pipelines, until it reaches domestic or industrial users. This difference has a non-negligible impact on the efficiency of the transport process: the electricity grid is in fact, by its nature, subject to leaks (called "grid losses") which, in the case of the low voltage grid, can come to represent 10% of the energy supplied and which are normally calculated as a cost to be borne by the end customer. In the case of gas, however, the dispersions are minor, and almost always occur during the gas extraction phase, not during its distribution.

The gas supply chain is normally divided into two different moments: the first, called up-stream, includes the phases of research and extraction of the gas, its compression or liquefaction, import into the country of destination and, if necessary, regasification. . Once the gas has arrived in the national territory, the down-stream phase begins, which instead concerns its storage and transport to the consumers' users.

It is important to underline that almost all the gas that is used in Italy is imported into our country through the international gas pipeline network; in fact, national gas production covers an extremely small percentage of our energy needs, which are constantly decreasing (at the beginning of the 2000s the gas produced in Italy covered about 20% of the country's needs, in 2021 it was just enough for 4, 4%). The gas that flows into Italy from gas pipelines every day is partly used directly, while the surplus gas is stored ("hollowed") in huge underground deposits which constitute the country's energy reserve.

The relationship between the gas and electricity supply chains

When comparing the gas and electricity supply chains, there is an element that cannot be overlooked, namely the fact that a significant percentage of the gas that Italy imports from abroad is used to power thermoelectric plants, and therefore to produce electricity.

According to data from Terna - the company that manages the electricity distribution network in Italy - most of the electricity that feeds our network is produced in thermoelectric plants (52% in 2020); 82% of these plants use natural gas as an energy source. This means that a very high percentage of the electricity we have depends, in fact, on the presence of natural gas, without which we would not be able to operate our plants. For this reason, the cost of electricity is closely related to the cost of gas, and the availability of one is bound to the availability of the other.

The choice of having an electric heating system, or not connecting one's kitchen to the gas network, must therefore be taken taking into account this fundamental element: using electricity supplied by the national electricity network as an energy source still means remaining "indirectly" connected with the gas network. This starting point is essential if you want to make truly conscious decisions.

Electricity production by source

Electricity production by source
Source: Terna