• EU has given its approval for Italy’s renewable energy scheme with an estimated budget of €5.4 billion ($6.07 billion)
  • Onshore wind, solar PV, hydroelectric and sewage gases are eligible technologies under the scheme
  • Projects with less than 1 MW capacity will get premium which will come with a clawback mechanism
  • For those projects with more than 1 MW capacity, competitive bidding will be the way to decide the premium

The European Commission has given its consent for Italy’s renewable energy scheme with an estimated budget of €5.4 billion ($6.07 billion). This will support the installation of renewable energy technology in the Southern European country, including onshore wind, solar PV, hydroelectric and sewage gases.

Until 2021, till when the scheme will be in effect, Italy will provide a premium to renewable installations of less than 1 MW capacity. It cannot, however, be higher than the difference between the average production cost for each renewable technology and the market price.

There is also a clawback mechanism which means if the market price is above the average production cost for each renewable technology, selected installations will no longer receive a premium and would instead have to give back to the Italian authorities the additional revenue ensuring that ‘state support is limited to the minimum necessary’.

For projects more than 1 MW capacity, competitive bidding will decide the premium which will be open to all renewable installations. Smaller projects will be selected based on a combination of environmental and economic criteria.

“More renewable energy in power generation is essential for the future of our planet and environment. The €5.4 billion scheme will increase the level of Italy’s electricity production from renewable sources. This is in line with the EU environmental objectives and our common State aid rules,” said Commissioner Margrethe Vestager, in charge of competition policy at the European Commission.  

All EU member states have the mandate of achieving 32% renewable energy share in the total energy mix by 2030. According to SolarPower Europe’s Global Market Outlook, Italy’s installed solar PV capacity at the end of 2018 was over 19.8 GW and is expected to grow to more than 29 GW by 2023 in its medium scenario (see SolarPower Europe: 800 GW New PV By 2023).