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Italy: RES1 Decree - Update

  • Italy
  • Energy and infrastructure - Clean energy

11-03-2019

The Italian Renewables Decree, as amended (the “RES1 Decree”), is expected to come into force soon. The final draft is currently being reviewed by the EU Commission in Brussels, Belgium, and has announced that, pending a final analysis of the incentives for hydropower plants, the RES1 Decree is in final form. This bulletin is a follow-up to our previous bulletin on the same topic.

We set out below the key points and aspects of the RES1 Decree:

What does the RES1 Decree cover? The RES1 Decree is aimed at promoting the deployment of clean energy power plants in Italy from 2019 through to 2021. Access to the incentives will either be by registration in registers or participation in competitive reverse bid auctions via eight different tenders between January 2019 and May 2021 (the exact timing of the first auctions/access to registers is expected to be June or July 2019 and the timetable to be pushed out accordingly).

Who can apply? The registration and auctions will be divided into four different categories: (A) wind and solar PV plants; (A-2) solar PV plants where the relevant modules have been installed to replace eternit or asbestos roofs; (B) hydroelectric, geothermal and gas-powered plants; and (C) wind, hydroelectric and geothermal and gas-powered plants subject to partial or total revamping. The Ministry of Economic Development (“MISE”) plans to allocate 770 MW of installed power for solar PV and wind between 2019 and 2021 through the registration/tender procedures and 800 MW to solar PV plant where the relevant modules have been installed to replace eternity or asbestos roofs (A-2 category). A further 80 MW will be allocated through registration to category B, and 120 MW to category C. In addition, the capacity thresholds to be allocated through reverse bid auctions over that three-year period total 5,500 MW for category A, with 110 MW and 620 MW to be allocated to categories B and C respectively. This is an increase from the original quotas which will no doubt form part of Italy’s strategy to achieve its reduction in emissions targets. The eligibility criteria are as per the previous draft.

When will the RES1 Decree come into force? The RES1 Decree is expected to come into force in the first quarter of 2019 (i.e. March) according to MISE. Stakeholders in the sector believe that March 2019 is realistic. Given that the first of the eight rounds of registration and auctions was expected to be launched last 31 January 2019, it should be realistic to expect the first round in June or July 2019, which will be followed by a new round every four months (i.e. May and September of 2019, January, May and September of 2020 and January and May of 2021).

Why now? The RES1 Decree is part of the Clean Energy Package 2020-2030, which the EU is currently working on, and Italy’s new energy strategy for the period 2020-2030. The Italian Government is aiming for the share of renewables in the energy mix to increase from around 17.5% currently to 27% in 2030.

• Other interesting aspects of the RES1 Decree:

o Incentives for the replacement of eternit or asbestos: Solar PV plants installed on roofs where the asbestos or eternit is removed as part of the installation are entitled to a premium of 12 €/MWh on all the energy generated. There is also an additional premium of 10€/MWh for plants with a nominal power output of up to 100kW.

o “Grace Period” of bonuses: Fifteen (15) months (rather than twelve (12), as provided for by the former version of the RES Decree) is the time limit between the notice of awarding the incentive and the plant’s entry into operation without the bonus being reduced.

o PPA platform: The draft of the RES1 Decree mentions the possible setting up of a platform for the negotiation of PPAs. The new RES1 provides for features on the GSE’s website related to projects aimed at promoting the relationship between the players in the market.

If implemented, the new regime is expected to stimulate further interest in large-scale solar PV plants in Italy. It is likely that this regime will run in tandem to the development of the PPA-backed project model in Italy.

If you would like to discuss further, discuss clean energy opportunities in Italy or the market generally, please contact the team below.

For more information contact

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