European Commission approves Italian state aid to support renewables

In Belgium, the European Commission has approved, under EU State aid rules, an Italian scheme to support a total of 4590 MW of new capacity for electricity production from renewable energy sources. The scheme contributes to the EU’s strategic objectives relating to the European Green Deal, while helping to end dependence on Russian fossil fuels and fast forward the green transition.

The scheme will support the construction of new plants running on innovative and not yet mature technologies, namely geothermal energy, offshore wind power (floating or fixed), thermodynamic solar, floating solar, tidal, wave and other marine energy as well as on biogas and biomass. The plants are expected to add a total of 4590 MW of renewable electricity capacity to the Italian electricity system. Depending on the technology, the deadline for successful plants to enter into operation varies between 31 to 60 months.

Under the scheme, the aid will take the form of a two-way contract for difference for each kWh of electricity produced and fed into the grid, and will be paid for a duration equal to the useful life of the plants. The projects will be selected through a transparent and non-discriminatory bidding process, where beneficiaries will bid on the incentive tariff (the strike price) needed to carry out each individual project. The reference price for electricity will be calculated as the hourly zonal price, which is the electricity price at the time the energy is fed into the grid and in the market area where the plant is located.