The Italian Government intends to introduce a new aid initiative that supports electricity production from sources such as solar and onshore wind.
Renewable installations benefitting from the scheme will receive support in the form of a premium on top of the market price. This premium cannot be higher than the difference between the average production cost for each renewable technology and the market price.
The Italian scheme also includes a clawback mechanism. If, in the future, the market prices were to move above the average production cost for each renewable technology, the selected installations would no longer receive a premium and would instead have to give back to the Italian authorities the additional revenue.
This is to ensure the state support is limited to the minimum necessary.
For larger projects above 1MW, the premium will be set through a competitive bidding process open to all types of installations.
Smaller projects will be selected based on a combination of environmental and economic criteria.
Commissioner Margrethe Vestager, in charge of competition policy, said: “More renewable energy in power generation is essential for the future of our planet and environment. The €5.4 billion scheme will increase the level of Italy’s electricity production from renewable sources. This is in line with the EU environmental objectives and our common state aid rules.”