The energy transition implies the progressive substitution of fossil energy sources with renewable ones and, among other things, the electrification of consumption. This, in turn, will increase the importance of stationary storage systems, essential tools for the integration of non-programmable energy sources in the energy system.

Such transformation of the energy sector might represent an opportunity for the Italian economic system if storage systems were produced domestically instead than imported.

This study simulates the socio-economic impact of the construction of a gigafactory to produce stationary energy systems in Italy using an input-output (IO) model. Such model is based on the latest version of supply and use tables issued by the Italian Statistical Institute (Istat). IO models are systems of linear equations based on matrices which represent economic flows between the economic sectors, households, the government, and foreign countries. Such models, therefore, allow to assess the impact of an exogenous shock on the main economic variables.

Data needed to build the model are from the literature and from a company leader in storage system manufacturing.

The initial investment, which implies two years of construction activities, has an impact on the economy of about 0.02% of the Italian GDP in 2019, for each of the two-year construction time. When operating, the gigafactory generates an impact equal to 0.04% of the Italian GDP for each year in which operates.
Looking at the multipliers, the production of stationary storage systems has a greater impact on the energy and natural gas supply sector, on the wholesale trade sector and on metallurgical manufacturing. Impacts on employment are slight due to the high capital intensity of the storage system manufacturing industry.

Storage system production implies the use of great quantities of chemicals and raw materials which are currently almost entirely imported. If such materials were produced in Italy, the impact on Italy’s GDP would be 13% higher with respect to the baseline scenario.

The major limiting factor of this study is that impacts are not easy to interpret in relation to the Italian economy. For this reason, it could be interesting to develop and compare alternative investment scenarios to the gigafactory one. Alternatively, the gigafactory scenario itself could be expanded to to include the downscaling of sectors closely related to fossil fuels.

The Report is available on the Italian site