S.11. State Aid

D.

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EC approves €5,4 billion Italian aid to electricity production from renewables

Friday, June 14, 2019


The aid will provide significant support to the Italian renewable energy sector until 2021.

The EC approved under EU State aid rules a €5,4 billion Italian scheme to support electricity generation from national renewable sources (RES).

The Italian government will introduce a new aid measure to support electricity production from RES, such as onshore wind, solar, hydroelectric and sewage gases. This should help Italy reach its renewable energy targets and the aid will be applicable until 2021.

Beneficiary RES facilities will receive a premium on top of the market price, which is capped to amount of the difference between the average production cost for each renewable technology and the market price.

The Italian scheme also includes a so-called ‘claw-back’ mechanism whereby selected installations would no longer receive the premium if the market price exceeds the average production cost for each renewable technology. Instead, any additional revenues would have to be reimbursed to the Italian authorities.

For larger projects (i.e., above 1 MW), the premium will be set through a competitive bidding process open to all, while smaller projects will be selected based on a combination of environmental and economic criteria.