June 20, 2012 / 1:26 PM / 7 years ago

Italy court reverses Enel coal plant ruling

* Top Italy court sets permission process in motion

* Enel first presented coal conversion plans in 2005

* Enel seeking to diversify fuel mix

MILAN, June 20 (Reuters) - A top Italian court cleared the way on Wednesday for Enel to restart work on converting a major power plant in the north east of the country to coal, part of the utility’s plans to diversify its fuel mix.

The State Council, Italy’s highest administrative court, made a ruling on Wednesday that will allow the environment ministry to reopen the permitting process for the conversion to coal from fuel oil of Enel’s Porto Tolle plant.

Last year, the court cancelled government clearance for Enel’s 2.5 billion euro conversion plans at the site as it came under fire from environmentalists.

Excessive red tape and grassroot opposition has held up many energy and infrastructure projects in Italy.

Earlier this year the BG Group put on hold plans to set up a liquefied natural gas (LNG) import terminal in southern Italy after persistent delays in the permitting process.

Enel, Europe’s No. 2 utility in terms of installed capacity, had planned to start converting its 2,640 megawatt oil-fuelled Porto Tolle plant to use clean coal technology at the end of last year.

State-controlled Enel first presented its conversion plans for Porto Tolle in 2005. Conversion work was expected to last 5 years and cut the plant’s capacity to 1,980 MW.

Since Enel took the decision to convert the plant, the economic crisis has hit businesses and household spending, sapping demand for energy across the country.

“We’re not in a hurry to see the Porto Tolle coal station set up. There isn’t enough demand,” Enel CEO Fulvio Conti said in March. (Reporting by Philip Baillie; editing by James Jukwey)

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