‘Clawback’ Measures Against RE In Italy

Renewable Energy Industry Launches Protest Against Italy’s Law Decree 04/2022

‘Clawback’ Measures Against RE In Italy

Italian renewable energy industry fears that some provisions in the government’s latest Law Decree 04/2022 can undermine investor confidence and lead to significant wholesale energy markets distortions. (Illustrative Photo; Photo Credit: Shaiith/Shutterstock.com)

  • Renewable energy industry in Italy is upset with the government’s Law Decree 04/2022 article 16 that will apply to projects of over 20 kW capacity
  • It stipulates a fixed reference Feed-in-Premium tariff till December 31, 2022 based on historical average zonal electricity prices in the country
  • The industry associations want the government to withdraw the same and engage in a constructive dialogue to reach a balanced solution to solve the high energy prices related crises

Italian government’s Law Decree 04/2022 (DL Sostegni ter) aimed at controlling rising energy prices in the country has infuriated the solar and renewable energy industry at large who claim article 16 has ‘clawback’ measures against PV plants that can undermine investor confidence, and must be withdrawn. The industry instead wants to initiate a constructive dialogue to reach a balanced solution.

Sharing details of the measures introduced, several electricity and renewable energy industry associations along with European solar PV lobby association SolarPower Europe (SPE) have issued a joint statement.

They say article 16 of the decree stipulates a fixed reference Feed-in-Premium tariff for projects above 20 kW which a vast majority of projects will receive until December 31, 2022 based on historical average zonal electricity prices in the country.

Apart from solar PV plants, the measures will also apply to geothermal, hydro and wind merchant power plants.

Expect ‘significant wholesale energy markets distortions’ and on the ‘behavior of buyers and sellers’ in the market with these measures, warns SPE. The industry also said it might affect the free formation of prices as required by the Electricity Regulation (2019/43) ‘setting a de facto unavoidable and administratively determined strike price for any possible future Power Purchase Agreements (PPAs) in contradiction with the Government’s stated goal to promote the conclusion of such contracts in the Italian power market’.

“Italy needs to accelerate and simplify permitting procedures in order to install at least 8 GW of new renewable capacity every year until 2030 to achieve the Fit-for-55 targets. However less than 1 GW/year has been installed in recent years, mainly due to lengthy and complex permitting,” explains SPE. “Going forward with the current version of Article 16 of the Law Decree 04/2022 risks further slowing down the energy transition process in Italy and Europe, putting at risk vital investments for the entire economy.”

Italy’s renewable energy market is fraught with challenges, especially those related to complex bureaucratic hurdles that are blamed by the industry for delaying the country’s energy transition. In July 2021, SPE joined local renewable energy associations to demand the government to adopt simplification decree to boost renewable prospects of Italy (see European RE Bodies Call On Italy To Simplify Processes).

The latest renewable energy auction, 7th round, concluded by the Italian energy agency GSE received proposals for 1.8 GW renewable capacity as against 4.825 GW offered. However, after several disappointing Italian auctions for solar in recent times, this time it won big – 710 MW in the form of over 60 projects.

Italy’s Enel was one of the winners, securing 130 MW capacity including 89.2 MW solar power. This solar capacity will be established in the form of 2 projects in Piedmont region and Sicily. Another 3.1 MW was from the registers quota with a total of 8 projects including 6 for new solar capacity for the company’s own building rooftops and on Enel land in Tuscany, Lomnbardy and Campania regions. Remaining capacity of 37.3 MW was awarded as refurbishment of 3 operational hydro power plants.

Germany’s juwi also announced having won 3 solar projects in this round with 4.5 MW, 5 MW and 2.7 MW capacities. Juwi shared that the successful bids in the tendering round were between €0.06263 per kWh and €0.0686 per kWh.

About The Author

Anu Bhambhani

Anu Bhambhani is the Senior News Editor of TaiyangNews

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