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Italian energy markets have been dominated by the once-fully state-owned firm ENI since the company’s inception in 1953. Though it has been partially privatized, ENI still holds an effective monopoly over Italy’s natural gas market; it controls nearly 70 percent of natural gas delivered to the national grid. The Italian government, which once controlled 100 percent of the natural gas through ENI, was forced to allow competition from new entrants in the natural gas sector and the unbundling of natural gas production, distribution and transmission in order in order to comply with EU liberalization regulations.
One such new entrant is the efficient Edison. Owned mainly by the French electricity utility EDF and A2A (a merger of the Milan and Brescia utilities), Edison has a 15.7 percent share of the Italian natural gas market. Founded in 1883 as a Milan energy utility, Edison only entered the natural gas market in the 1990s and has sought to dent ENI’s monopoly ever since. However, without a serious energy source of its own, Edison has had to rely mainly on Rome to force ENI to share domestic natural gas concessions, as well as on direct purchases of natural gas from foreign suppliers through both spot and long-term contracts. That is, until now.
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