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guide - Italy
February 2013
Overview
Conclusions
Overview
Italy has one of the highest energy import dependence rates as compared to other EU member
states. Lowering dependence on energy imports and complying with the European 20-20-20 green
commitments (20 per cent cut in emissions, 20 per cent increase in energy efficiency and 20 per
cent renewables generation by 2020) are two objectives at the heart of Italys domestic energy
policy.
Italy is today a leading producer of electricity from renewable energy sources (RES). The solar
photovoltaic (PV) sector has historically been the dominant renewable energy technology in Italy
due to the Italian incentive regime for solar PV projects and also to Italys advantageous geographic
position and resulting sun exposure. Solar PV plants located in the south of Italy achieve a very
high level of utilisation - over 1,500 hours a year - which has led developers from around the world
to choose the regions in southern Italy to build some of the world's largest solar PV parks.
The focus on ground-mounted solar PV has lessened slightly in recent months, mainly because of
cuts in public incentives that were announced in 2012. Nevertheless, Italys renewable energy
market remains vital. Interest has been increasing in developing other types of renewable projects,
including wind, geothermal, wave and tidal power, biomass, biogas, landfill gas and sewage
treatment gas. Italy's current legislative regime provides for incentives for the generation and
distribution of energy produced by each of these RES.
Grid capacity
Lack of capacity of some portions of the national grid is an important issue which has had a
negative impact on the development of new renewable projects.
As a result of this, the Italian legislature has imposed a new obligation on grid operators to connect
renewable generating plants to the grid and give them priority of dispatch. Moreover, specific rules
concerning the interconnection procedure have been adopted by the energy authority (AEEG), in
the Single Text for Interconnections (TICA), rendering the process more transparent, predictable
and reliable, to the benefit of developers and, ultimately, consumers.
k is equal to 1 for plants that were operational by 31 December 2007. For plants that became
operational after such date, their level of support will be determined in accordance with the
coefficient introduced for different technologies by Law 2007; and
National caps
Decree 6 July 2012 introduced a new incentive regime for renewable generating plants which enter
into operation from 1 January 2013, and included for the first time a cap on national spending for
renewables incentives. In particular, for the years from 2013 onwards the Decree establishes a
maximum of 5.8 billion in public funds which can be used to support renewable plants. In
addition, the Decree sets a cap on public funds which may be used to support the refurbishment
and/or rebuilding of existing plants. The cap does not however apply to solar PV installations.
Enrol in the Register of Qualified Plants. The operator of a new plant with <5MW capacity
must apply to GSE to request that the plant be enrolled in the Register of Qualified Plants. This
must be done within a deadline and according to the requirements and procedures set out in
Decree 6 July 2012. The GSE will admit plants to the Register according to a priority criteria
which is established by the legislature and will publish the names of the enrolled plants.
Participate in a Descending Auction. The operator of a new plant with capacity which
exceeds the threshold of 5MW must apply to GSE to obtain permission to participate in a
descending auction, managed by the GSE. This must be done following the requirements and
procedural rules established by Decree 6 July 2012. The applications for participation in the
descending auctions which are accepted by GSE will be ranked according to the applicants best
offer.
Direct access. This option is available only to very small plants. Timing for applications and
conditions for obtaining direct access to incentives are established by Decree 6 July 2012. As long
as the national cap is not reached, plants admitted to the ranking for direct access are granted the
incentive.
Premium incentives are available for certain types of plants, such those using biofuels.
Incentives will be paid for a period that varies depending on technology.
Conto Energia V also provides for premium and special tariffs for self-consumption plants, plants
which have sustained works to remove asbestos, plants developed by public entities, and others.
Single authorisation
As in the case of other FER plants, the single authorisation is issued by a regional authority, or by
another delegated authority, in compliance with local environmental and town planning laws. Prior
to the issuance, any public authority having an interest in the matter has a right to issue an opinion
on the proposed project. These opinions are considered in the context of the single authorisation
process. The single authorisation will contain binding conditions for the development of the project.
At the conclusion of the single authorisation procedure, the authorisation is published and can be
appealed by interested third parties for a variety of reasons. The developer has the right to enter into
agreements with local authorities to establish compensatory measures as long as these are in
compliance with criteria set out in the relevant regional legislation.
Interconnection
For interconnection of a new renewable plant to the grid, an agreement must be reached between
the developer and the local grid operator, pursuant to the rules and criteria established by TICA. The
single authorisation will contain instructions on interconnection to which the grid operator must
adhere. The developer or plant owner must enter into an agreement with the grid operator for the
management of the interconnection and the provision of relevant services.
The energy produced can be sold in the market or to the GSE by way of a special agreement. The
revenues generated from such sales are, for now, to be counted in addition to the revenues provided
by the incentive scheme, but from 2013 the FiT for solar PV plants will include both this and the
public incentive revenue.
Public interest
Pursuant to Decree 387/2003, renewable energy plants and related infrastructure are classified as
public interest properties. As such, a developer is entitled by law to expropriate the land required
for the development of such projects in the event that an agreement with the relevant land owner(s)
is not reached amicably. The expropriation procedure is led by the relevant local authority, which
notifies all the interested landowners who, in turn, either enter into an agreement with the developer
or face expropriation of their property in exchange for an indemnity from the developer.
Conclusions
As a result of strong government support and co-operation from banks and other financial
institutions, the Italian renewable energy market continues to thrive. The registered capacity of solar
PV has grown at an overwhelming 3000% over the past three years. The wind market has also seen
sustained high levels investment, with the number of installations increasing by 39 per cent over the
last year.
While the rate of developing ground mounted (as compared to roof-top) PV plants has slowed in the
last year as a result of recent cuts in incentives available under the Conto Energia V, all the other
RES are still benefiting from a very favourable public incentive regime. In addition, in recent
months, developers have also noticed improved efficiency in the permitting procedures.
Given the existing government incentive regime, the renewable energy market in Italy looks set for
sustained growth in the following years. The current legislation still provides incentives at an
adequate level for developers who are looking at the Italian renewable energy market with interest.