Italy’s RES auctions at risk of delay amid industry opposition

Source: Heren


LONDON (ICIS)--Italy’s wind power and hydroelectricity associations have again taken aim at the renewable energy sources (RES) subsidy decree draft adopted by the new government. It is possible that this opposition from renewables producers might cause subsidy auctions to slide beyond the provisional 31 January 2019 deadline.

Earlier this week ANEV, Italy’s leading wind producers’ association, aired frustration at the government’s decision to adopt a version of the decree that largely resembles that adopted by the outgoing centre-left government in March.

The first version of the decree opened the door to technology-neutral subsidy auctions putting in competition solar and wind power for one pot of funds and hydropower, geothermal and biogas for a separate pot.

Solar and biogas plants built on decommissioned waste landfills were the best positioned to win the auctions, according to analysts .

Hydropower producers were especially bitter when reading the decree draft.

Leading association Assoidroelettrica pointed to a punitive tax regime applying to the industry and the need for greater diversification of base tariff levels applying to hydropower projects based on their dimensions. Both factors represented an unfair disadvantage when competing with other technologies, Assoidroelettrica maintained.

New government, old draft

The electoral shake-up that brought the anti-establishment Five Star Movement (M5S) and right-wing League to the government had raised hopes among several renewables producers that the draft would be thoroughly revised.

Expectations were especially high in the industry with regard to the M5S, which has championed a strongly pro-renewables stance since its inception a decade ago.

“The positions extremely in favour of clean technologies for the production of power repeatedly expressed by [M5S] minister Luigi Di Maio had made stakeholders hope in a clear-cut change of direction by the ministry of economic development,” ANEV said on Monday.

Instead, in September the ministry of economic development headed by M5S leader Luigi Di Maio largely confirmed the draft devised by the outgoing government, despite having hinted at more significant amendments .

Potential delays

The draft adopted by the new government is currently in the process of being discussed with regional governments and the European Union, which need to agree on the final text.

This, together with opposition from small- and medium-size renewables producers, might delay the adoption of the decree and push the first auction beyond the 31 January 2019 deadline set in the latest draft.

“I doubt that the schedule can stay this tight, since the discontent of the vast majority of stakeholders really is big,” Assoidroelettrica general director Paolo Taglioli told ICIS.