Italy’s government has approved long-awaited legislation laying out details of a new renewable energy incentive scheme which will see wind farms over 5MW competing for a feed-in-tariff (FIT) through a controversial competitive auction system.
Italy’s economic ministry said the legislation would bring Italian renewable energy incentive prices closer to the European Union average.
Crucially, the ministry has hypothesized that a 10MW onshore wind farm could receive an incentive of roughly €124/MWh with the new scheme compared with a current level of about €148/MWh.
Less than five years ago, Italian wind incentive prices were as high as €200/MWh. The government chose not to bend to industry requests to lift the threshold at which the auction system would go into effect.
Despite incentive cuts, the government said Italy will exceed 2020 targets. Indeed, Italy plans to raise its target for electricity from renewable energy sources to 32-35% from a current 26%. The government argues the new system is simply more economically sustainable.