New Italian Wind Incentive Scheme to be Agreed by End of 2011

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Researched by Industrial Info Resources Europe (Galway, Ireland)--A new wind energy feed-in-tariff (FIT) system for Italy is due to be approved by the end of 2011. The decree, which was initially expected to be ready by September, will be applied to new windfarms that are brought online from 2013 onward. A spokesman for Italian Energy Undersecretary Stefano Saglia has confirmed that the timetable is unlikely to be affected should the current government fall.

Prolonged uncertainty about incentives has continued to cause financing difficulties for Italian windfarms. Market participants are anxious to know details of a planned auction system through which larger wind projects will be required to compete on the FIT; indications of FIT levels for smaller projects; and details of how projects that are currently in Italy's green certificate scheme will be shifted over to the FIT in coming years.

The Italian wind industry already has been hit this year with higher corporate tax rates. Under the new tax regime, renewable-energy companies with a turnover exceeding €10 million ($13.64 million) and taxable income higher than €1 million ($1.36 million) will be subject to an increase on the additional corporate tax rate, from 6.5 percent to 10.5 percent. This new rate will be applicable for three tax periods starting on January 1, 2011.

In related news, negotiations between the Spanish wind association AEE (Madrid, Spain) and the government concerning post-2012 tariffs have broken down, creating uncertainty for investors. With the Socialist government facing defeat in this month's elections, the sector has asked industry minister Miguel Sebastian to drop his proposals for post-2012 tariffs and leave the drafting of new regulations to his successor.

Industrial Info is tracking approximately 100 windfarm projects in Italy and Spain. For further information, see Industrial Info's Power Tracker.

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