European Commission authorises support for renewable energy in Italy
03 May 2016 | Mitigation
The European Commission has concluded that an Italian scheme aimed at supporting electricity generation from renewable energy sources is in line with EU state aid rules. The scheme will further EU energy and climate goals without unduly distorting competition in the Single Market.
In particular, the scheme will support Italy in reaching its EU renewable energy targets by helping to deploy around 1300 megawatts (MW) of additional renewable generation capacity.
The Commission assessed the scheme under its 2014 Guidelines on State Aid for Environmental Protection and Energy. Under these rules Member States can grant state aid for renewable energy, subject to certain conditions. Europe should meet its ambitious energy and climate targets at the least possible cost for taxpayers and without undue distortions of competition in the Single Market.
The scheme will last until the end of 2016. All renewable energy technologies can benefit from the scheme, except solar power. According to Italy, solar power is already competitive on the Italian market without the need for direct support to the electricity produced, as confirmed by the significant generation capacity deployed in recent years without such support.
The type of support renewable energy projects can receive under the scheme depends on their size:
- large projects with more than 5 MW of installed power will compete in tenders specific for each technology;
- medium size projects with installed power between 0.5 MW and 5 MW enter a list specific for each technology, and will be prioritised subject to set criteria in order to receive support;
- projects smaller than 0.5 MW will have direct access to aid upon request.
The Commission found that the scheme promotes the integration of renewable energy producers into the market, in line with the Guidelines. Only small installations can benefit from feed-in tariffs, whilst larger installations will receive support through a premium, i.e. a top-up on the market price, which exposes these renewable energy sources to market signals. The scheme will also support the refurbishing of existing generators of any size, for example to increase their efficiency or extend their operational lifetime.
The Commission was therefore able to conclude that the scheme will increase the proportion of electricity generated from renewable sources and reduce pollution, in line with EU Energy Union goals, without unduly distorting competition.