EU Commission clears Italian aid for renewable electricity production

The scheme was approved under the State aid Temporary Crisis and Transition Framework (TCTF) adopted by the Commission on March 9 last year and amended on November 20 last year and on May 2 this year, according to an official release.

The measure will support the construction of new onshore wind, solar photovoltaic, hydropower and sewage gases electricity production installations.

The plants are expected to add a total of 17.65 GW of renewable electricity capacity. Installations must enter into operation within 36 months after the date of granting of the aid.

The aid will be granted on the basis of a transparent and non-discriminatory bidding process, where beneficiary will bid on the incentive tariff needed to carry out each individual project.

The aid will take the form of variable payment under two-way contract for difference for each kWh of electricity produced and fed into the grid. The incentive tariff will be paid over a period of 20 years.

In cases where plants have to cut production as per dispatching orders or in the event of zero or negative electricity prices on the day-ahead market, the incentive tariff will be granted for the potential electricity production rather than for the actual electricity production.

Plants with capacity lower than 1 MW can access the scheme directly. In this case, the strike price is administratively set by the Italian regulator. The aid amount will be calculated by comparing a strike price to the market price for electricity.

When the strike price exceeds the reference market price, the difference (price premium) is paid by the Italian government to the beneficiary on top of the market price. Conversely, when the reference market price exceeds the strike price, the beneficiary will have to pay the difference to the Italian authorities.

The Commission found that the Italian scheme is in line with the conditions set out in the TCTF.

ALCHEMPro News Desk (DS)