Italy at risk of not maintaining 17% renewables level – GSE

Italy is at risk of dropping below its EU 2020 target of meeting 17% of its energy needs through renewable plants unless older plants are regenerated, the president of Italy’s renewables payment agency GSE said on Monday. For this reason, the government should consider gearing new subsidy schemes to incentivise plant regenerations, rather than the installation of new plants.

“It doesn’t make sense to use subsidies to install new capacity in less productive wind areas since the market has already developed all the best areas by now,” Francesco Sperandini, president and CEO of GSE said at the 16th Italian Energy Summit meeting organised by Il Sole 24 Ore in Milan.

According to Sperandini, investments in plant regenerations would address the issue of falling generation rates from existing plants.

The pace at which renewables production rates dropped in the last year suggests this could be pivotal for Italy to maintain its compulsory 17% green energy generation target until 2020, after the country reached it well ahead of time in 2014, and maintained it in 2015.

Production from solar, wind, hydro, geothermal and biomass energy in the country was down 4.4% year on year in the first seven months of 2016 at 55.1TWh, data from Italian transmission system operator (TSO) Terna shows.

“The risk is that the 17% target for renewables doesn’t stick, after reaching it in [2014 and] 2015,” Sperandini said.

The pressure to bring new plants on line in time to obtain the advantage of high feed-in tariffs to renewables during the 2010-2012 boom years came at the cost of lower quality in the installation process as technology suppliers were struggling to meet the wave of demand from energy companies, Sperandini said.

Producers willing to renovate existing non-solar photovoltaic plants can apply for subsidies under the new renewables decree adopted by the government in June (see EDEM 27 June 2016).

Renovation subsidies, however, account for only 90MW out of a total 1.46GW of maximum renewable capacity that can be awarded subsidies through the decree. The 90MW quota is differentiated by source, with onshore wind having a 40MW allowance, hydropower 30MW and geothermal energy 20MW.

The application for renovation subsidies ends on 28 October (see EDEM 30 August 2016). riccardo.patrian@icis.com