Auction uptake boosts Italy’s latest renewable energy drive, says GlobalData

Italy has approved a new auction scheme to propel the growth of renewable energy installations in the country, for the first time since the end of the Conto Energia era, which ended in 2013. According to leading data and analytics company GlobalData, at the end of 2013, the country had solar PV installations of 18.1 gigawatts (GW) of capacity.

Mohit Prasad, Power Project Manager at GlobalData, comments: “These seven rounds of auctions are the country’s first set of auctions for large-scale renewable energy projects since the feed-in-tariff (FiT) program Conto Energia was closed in 2013. The Conto Energia program, which granted incentive tariffs for energy produced by photovoltaic (PV) systems over a period of 20 years, first came into effect in 2005. From 2005 until 2013, the solar PV sector in Italy recorded growth at a compound annual growth rate (CAGR) of 119%.

“Post the removal of Conto Energia, where the country witnessed massive solar PV installations, the growth of renewable energy sector has remained subdued. However, Italy’s National Integrated Plan for Climate and Energy 2030, is targeting a 55.4% renewable share in the electricity sector. The country has set a solar PV target of 50GW by end of 2030, while the target for wind has been set for 18.4GW.” 

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The auction scheme, through which around 4.8GW of renewable energy capacity will be contracted, will have seven bidding rounds until 2021. Under the scheme, which is part of Renewables Decree (RES1 Decree), different categories have been divided depending on the type of technology. Category-A is for wind and solar PV plants, Category-B is for hydroelectric and gas based plants whereas Category-C is for wind, hydroelectric and gas plants subject to partial or total revamping. For Category-A, the first two procurement rounds will each realize around 500MW of allocated capacity while the next three rounds will have an allocated capacity of 700MW each and the final two will have contracted capacity of 800MW each respectively.

Prasad concludes: “The first round of auction for Category-A was conducted in January 2020. The reference price was set at €70/MWh with the developers getting the option to bid with reductions between 2% and 70% on the reference price. Some 18 projects with prices between €48.65/MWh and €66.50/MWh were successful in the auction.

“The success of first round - which was oversubscribed - means the investments are coming into the sector. Italy’s plan to hold three rounds of tenders in 2020 and a further three in 2021 will definitely bring in more investments and thereby propel the growth of renewable energy in the country post the Conto Energia.”

Quotes provided by Mohit Prasad, Power Project Manager at GlobalData

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