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Simplification Decree : A new way forward for clean energy project permitting in Italy?

  • Global
  • Energy and infrastructure - Clean energy

05-07-2021

The Italian Government is looking to push on with the roll-out of its National Recovery and Resilience Plan (Piano Nazionale di Ripresa e Resilienza / PNRR) and a key part of that roll- out is how to implement the ecological transition which Italy needs to undergo in the coming months and years. One of the tools that the Italian Government is hoping to use is the Simplification Decree. The overarching idea behind this law is to simplify the often protracted and complex permitting procedures which large scale clean energy and other infrastructure projects have to go through in Italy.

We have set out below some key parts of the Simplification Decree to try and give you an idea of how the law hangs together. The decree is divided in two parts: PART I: Governance of the PNRR (sections 1-16); and PART II: Rules for accelerating and simplifying the procedures and strengthening administrative resources (sections 17 -67).

In order for this briefing to be accessible and useful, we have focused on those key changes which are mostly likely to affect clean energy projects. There is a lot of ground covered under the decree so we have split the key changes into groups:

A. New State Environmental Impact Assessment (EIA) procedure

  • A new State level EIA technical committee is to be introduced: This committee will replace the Regional EIA process for strategic PNRR-PNIEC (Piano Nazionale Infrastruttura Energia Clima) projects. The committee members will be appointed within 60 days of the decree being converted into law. It is yet to be determined how this committee will operate and interact with the Regional AU (Autorizzazione Unica) procedures.
  • Priority to be given to EIA and Strategic Environmental Assessments (SEA) for projects with proven economic value (greater than 5 million euro), with greater employment opportunities (employment of at least 15 people) or for projects where there is a peremptory deadline for implementation within 12 months: This is aimed at speeding up the permitting process for those projects which are considered strategic to achieve the national energy and climate plan goals.
  • Wind power plants with a capacity greater than 30MW and solar photovoltaic plants with a capacity greater than 10MW are subject to EIA and under the responsibility of the PNRR-PNIEC technical committee: It is unclear at the time of writing how this will impact the numerous large scale projects already in the PAUR (Provvedimento Autorizzatorio Unico Regionale)/AU permitting process. It will be important to monitor how new large-scale clean energy projects post 31 July 2021 are managed under the new procedure compared to the existing PAUR Regional procedures. We note that each Region across Italy has its own processes around how clean energy projects are dealt with in the PAUR/AU procedure.
  • There are changes to the rules on whether an EIA is required:
    • Public Authorities will have 30 days from publication of the preliminary study to submit comments.
    • If the Public Authority decides an applicant who is not submitting its project to an EIA needs to be clarified or requires further information, the Public Authority has 45 days to do so.
    • If the project is not deemed to be subject to an EIA, the competent authority has to decide on the applicant’s proposed environmental conditions within 30 days. The public administration has 30 days to give an opinion from the receipt of the project proposal.
    • The provisions on prior consultation also apply to PNIEC-PNRR projects.
  • There are new rules on PNIEC-PNRR projects and how the EIA procedure is started
    • For PNRR-PNIEC technical committee projects, the PNRR-PNIEC decides within 30 days from the conclusion of the public consultation and in any case no later than 130 days from the publication of the documentation necessary for requiring the EIA procedure. Within the following 30 days, the Ministry for Ecological Transition adopts the EIA decision, after obtaining the approval of the Ministry of Culture (within 20 days).
    • For other projects that are dealt with by the State, within 60 days from publication of the documentation for the EIA procedure, the authority adopts the EIA decisions, after obtaining the approval of the Ministry of Culture. There are also mechanisms in place to prevent the process stalling such as allowing the Ministry of Ecological Transition to intervene.

B. The Regional EIA procedure has been amended to accommodate the State EIA procedure:

The Sole Regional Authorisation (PAUR) procedure will have a preliminary stage with a preliminary steering committee to define what is to be included in the environmental impact study, the level of detail and methodologies required for its preparation and the conditions to obtain the authorisations and documents necessary for the project. The steering committee has 90 days to reach its opinion starting from the date of receipt of any additional documentation. The services conference will opine on the PAUR, the EIA measures and any conditions.

C. EIA Competence, Monitoring and Environmental Consultation

There are new rules on who deals with the EIA: If there are projects which require an EIA at State level and also at Regional level, the applicant sends to the Minister for Ecological Transition and the Region/Province (as appropriate) a notice stating the type of project and at which level the EIA should be carried out. There is then a 60 day period following which either the Ministry for Ecological Transition or the Region/Province will be responsible for carrying out the EIA.

D. Speeding up clean energy project permitting procedures

There are new rules on interventions located in adjacent areas: The Ministry of Culture takes part in the sole authorisation procedure for clean energy projects in areas subject to protection under the Cultural Heritage and Landscape Code, as well as in areas next to assets subject to protection under the same legislative decree. For plants located outside protected areas, the Ministry of Culture cannot undertake the objection procedure that allows administrations in disagreement with the final position of the steering committee to raise objections and come to a possible different conclusion.

There are new rules on storage plants: Stand-alone electrochemical storage plants and the related connection works are not subject to EIA in the following cases:

  • electrochemical storage plants located within areas where there are industrial plants of any kind, even if no longer operational or in the process of being decommissioned, or located within areas where there are fossil-fuel powered power plants with a capacity of less than 300MW in service or located in quarry areas or areas of production and treatment of liquid and gaseous hydrocarbons in the process of being decommissioned, which do not involve extension of the areas themselves, nor increase in height compared to the existing situation, nor require a change in the adopted urban planning instruments;
  • electrochemical storage plants located within areas already occupied by fossil-fuel power plants with a capacity greater than or equal to 300 thermal MW in service, as well as "stand-alone" plants located in non-industrial areas and any connections to the grid; and
  • electrochemical storage plants below the threshold of 10MW wherever located.

There are new rules on solar plants: The construction and operation of photovoltaic plants with a capacity of up to 10MW connected to the medium voltage grid and located in areas of industrial, productive or commercial use are subject to simplified authorisation procedure (PAS).

The thresholds indicated in Annex IV to the second part of the Environmental Code, in relation to projects subject to the EIA, are intended to be raised to 10MW for this type of plant.

Installations relating to solar photovoltaic plants for the production of electricity with a total capacity in excess of 10MW are included in the list of projects falling under state jurisdiction set out in Annex II to Part Two of the Environmental Code.

Solar plants incentives: It is possible to apply for state incentives under Legislative Decree 28/2011 for ground-mounted solar plants on agricultural land that use vertical assembly of modules.

There are new rules on material interventions: It is possible to use the notice relating to free building activities (comunicazione relativa alle attività in edilizia libera) for the following:

  • Interventions to be carried out on projects and solar photovoltaic and hydroelectric plants that do not involve changes in the physical dimensions of the equipment irrespective of the resulting capacity after the intervention;
  • Interventions to be carried out on wind projects which involve a minimum reduction in the number of wind turbines compared to those already existing or authorised, irrespective of the resulting capacity following the intervention.

Looking forward

As can be seen from the above changes, there is the potential to significantly streamline certain elements of the permitting process for utility scale solar projects, in particular in relation to the environmental aspects of such projects (one of the most delicate and influential aspects of the permitting process).

The Simplification Decree will either be converted into law by 31 July 2021 or will expire and no longer be in force. It is expected that the Simplification Decree will be converted into law meaning the permitting regime for solar plants above 10MW will be subject to the State EIA procedure. The new legal framework concerning solar plants above 10MW will be applied to projects submitted from 31 July 2021.

Whether this decree will be the solution to cut through the backlog of permit applications for the several GW of clean energy (mainly solar) projects in Italy is not known. It will be important for developers and funds alike to monitor how the Simplification Decree is implicated at a regional/provincial level in order to ensure that project applications are followed in accordance with the new regime. It will be equally important for developers and funds to assess whether to submit projects prior to 31 July 2021 deadline or wait until the new regime is up and running after said date.

If you would like to discuss how the Simplification Decree will impact your project, one of our experts is on hand to help.