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Italy: RES1 Decree: Italy’s Renewables Decree gets the green light

  • Italy
  • Energy and infrastructure - Clean energy

19-07-2019

Status update

The long awaited Italian Renewables Decree, as amended, (the “RES1 Decree”) has been officially signed by the Ministry of Economic Development (“MISE”) and the Ministry of the Environment. After having received the final blessing from the European Commission, the RES1 Decree was sent to Italy's Court of Audit for final analysis and approval before publication in the Official Gazette. The Court is expected to sign off on the legislation within 30 days thus allowing the first of the seven auctions to take place in September this year.

What is the aim of the RES1 decree?

The RES1 Decree seeks to incentivise the deployment of 8GW of renewable energy plants by around 2023/2024. This will equate to around 12 billion kWh of electricity a year and an investment of circa €10 billion. If achieved, this will undoubtedly play an important part in the Italian Government hitting its EU climate and energy 2030 targets.

Who can apply?

The registration procedure 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 and gas plants; and (C) wind, hydroelectric and gas plants subject to partial or total revamping. For plants covered under the auction process, category A2 will not apply. Over the course of the seven rounds, MISE plans to allocate 770 MW of solar PV and wind, 800 MW to eternit replacement solar PV plants, 80 MW to hydroelectric and 120MW to plants to be revamped under the registration process and 5,500 MW to solar PV and wind, 110 MW to hydroelectric and gas and 620 MW via the auction procedure between 30 September 2019 and 30 September 2021. There are certain criteria which have to be met in order to participate in the registration or auction procedures. Of note, under the auction procedure, participants will need to prove financial covenant strength either through bank comfort letters or capitalisation of the relevant participating company. Participants will also need to provide bank guarantees for 10% of the total development cost of the plant referred to in the auction application.

What incentives are available?

The RES1 Decree sets out the reference tariff for each category of plant according to the size of the plant. The tariff for wind and solar PV plants above 1MW (auction) is 70 €/MWh. The reverse bid auction allows a participant to offer a reduction to this tariff of anywhere between 2% to 70% as part of its bid.

Please click here to see a copy of the RES1 Decree which contains a full list of the tariffs. The Decree is currently only available in Italian.

Interesting aspects of the RES1 decree

- Promotion of certain types of renewable energy plants:

In determining which plants are successful in the registration or auction procedure, priority is given to, inter alia:

  • plants built on closed landfills and on sites of national interest (Category A);
  • plants installed in order on the roofs of schools, hospitals and other public buildings (Category A-2); and
  • all installations aggregated to and connected in "parallel" with the electricity grid and the charging points for electric vehicles (provided that the charging power is not less than 15 per cent. of the power of the plant and that each column has a power of at least 15 kW).

Furthermore, plants will not be able to be built on certain agricultural lands.

- “Grace period” of bonuses:

Solar PV plants have to enter into operation within 24 months of the notice of the tariff being awarded to a plant and for wind projects, the period is 31 months.

- PPA platform:

The RES1 Decree mentions the possible setting up of a platform for the negotiation of PPAs. A public consultation may be commenced in due course.

ES comment

The approval of the RES1 Decree by the EU Commission and the Italian Government will no doubt send a positive signal to the clean energy industry in Italy. In combination with the development of grid parity plants, Italy looks set to make significant inroads into its commitment to achieve its 2030 EU climate and energy targets over the next 5 years.

If you wish to discuss any of the detail of the RES1 Decree, please do not hesitate to contact one of our experts in the Energy & Infrastructure team.

For more information contact

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