The European Commission has greenlit a €9.7 billion Italian State aid scheme aimed at bolstering electricity production from renewable energy sources, accelerating Italy’s transition to a net-zero economy. This initiative aligns with thegoals set forth in the Green Deal Industrial Plan and was approved under the State aid Temporary Crisis and Transition Framework (TCTF), introduced in March 2023 and updated in November 2023 and May 2024. 713q

ing renewable energy expansion in Italy 3z3x2d

The Italian scheme, notified under the TCTF, focuses on fostering the construction of renewable energy facilities, including onshore wind, solar photovoltaic, hydropower, and sewage gas plants. These installations are projected to add approximately 17.65 GW of renewable electricity capacity and must become operational within 36 months of receiving aid.

Key features of the scheme include:

• Bidding process: Aid will be allocated via a transparent, competitive bidding process where beneficiaries propose incentive tariffs for their projects.

• Contract for difference (CfD): Payments will follow a two-way CfD model, ensuring financial stability for 20 years by compensating for market price variations.

• Market exposure: To encourage efficiency, only 95% of the electricity produced will be eligible for CfD , with the remaining 5% exposed to market conditions.

• Small installations: Facilities under 1 MW capacity can by the bidding process and receive istratively determined from ARERA, Italy’s energy regulator.

The scheme s for potential market price fluctuations, meaning the actual financial may be lower if electricity prices exceed initial estimates.

Compliance with EU guidelines 281w1c

The European Commission found the scheme to be compliant with EU State aid rules and the TCTF, citing its necessity, proportionality, and alignment with the Green Deal’s objectives. The aid will critical investments in renewable energy while fostering sustainable economic growth.

Background on the TCTF 6c5j1v

The TCTF was designed to assist EU Member States in achieving net-zero objectives. It enables for:

1. Renewable Energy Expansion: Simplified frameworks for investments in all renewable energy sources.

1. Industrial Decarbonization: Incentives for reducing dependency on fossil fuels through electrification and renewable hydrogen adoption.

1. Strategic Investments: Funding for sectors like battery production, wind turbines, and solar s.

All aid measures under the TCTF must be granted by December 31, 2025.

This approval underscores the EU's commitment to enabling member states to tackle climate change and transition toward a sustainable future while ensuring economic competitiveness.