European Commission Approves Italy's Green Energy Jackpot

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Italy's planned 23 billion-euro (US$26.7 billion) spending spree on renewable energy projects has been cleared by the European Commission (EC).

Renewables To Grow by Almost 50%

The European Commission (EC) has greenlit Italy's planned 23 billion euro (US$26.7 billion) investment package for renewable energy sources (RES) as it works to accelerate its energy transition. 

In line with the objectives of the Clean Industrial Deal, the investment in more renewable energy will contribute towards the renewable energy target set by the European Union (EU) for 2030. The scheme will support the "construction of installations that generate power using onshore wind, solar power, hydropower, and sewage (bio)gas." The plants are expected to add a total of 37.15 gigawatts (GW) of renewable electricity capacity, equivalent to roughly half of Italy's current RES capacity. According to Industrial Info Resources data, there are 789 Italian renewable energy projects in the pipeline worth 269 billion euro (US$312.4 billion) in potential investment. Wind farm projects account for the vast majority of future project investment at more than 250 billion euro (US$290 billion). 

Faster Rollouts

The EC adopted the Clean Industrial Deal State Aid Framework (CISAF) last June in an effort to speed-up the approval process for EU Member States looking to invest in rolling out more renewable energy and low-carbon fuels projects as well as decarbonize their heavy industry sectors. Teresa Ribera, executive vice-president for Clean, Just and Competitive Transition at the EC, commented: "With this 23 billion euro (US$26.7 billion) scheme, Italy will support the production of renewable electricity from various technologies, such as onshore wind, solar or hydropower, to reach the goals of the Clean Industrial Deal. The scheme will also help Italy reduce its dependence on fossil fuels imports and enhance its renewable energy share."

How It Works

Italy's financial support will be awarded via two-way contracts for difference (CfDs) that provide a bonus for each kilowatt-hour (kWh) of electricity produced and fed into the grid, based on a so-called strike price. The CfDs will be awarded via an auction bidding process for projects in excess of 1 megawatt (MW) in size. If electricity market prices are lower than the strike price, the state will pay the difference. If they are higher, the companies will pay back the difference. The CfDs will be in place for a period of 20 years. Plants with capacity lower than 1 MW can benefit from the scheme directly, without participating in a bidding process. 

Italy's Power Mix

Italy is still highly reliant on natural gas for much of its power. Gas-fired power stood at 44% of the mix in 2024 according to the International Energy Agency (IEA). This was followed by hydropower at 20% and a variety of renewables led by solar PV at 13.3%, wind at 8.2% and biofuels at 5.5%. Coal-fired and oil-fired power represent around 5% combined, and falling. This approved 23 billion-euro scheme will "significantly contribute to Italy's decarbonisation objective of reaching 39.4% of gross final energy consumption from renewable energy sources by 2030", according to the EC.

Key Takeaways 

• Italy's planned 23 billion-euro (US$26.7 billion) spending spree on renewable energy projects has been green lit by the European Commission (EC). 
• Industrial Info Resources is tracking 789 Italian RES projects in the pipeline worth $269 billion euro (US$312.4 billion) in potential investment. 
• More than 250 billion euro (US$290 billion) of planned investment is focused on wind farms. 

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).