The European Commission has given the green light to Italy's state aid initiative, which could reach €35.3 billion over two decades, aimed at bolstering renewable energy production. The aid package, sanctioned by the EU on Tuesday, will be funded through a levy on electricity bills, with consumers footing the bill.
The scheme, set to operate until 2028, intends to assist Italy in slashing carbon emissions by supporting the development of new energy plants utilizing innovative technologies such as geothermal, offshore wind, biogas, and biomass.
According to the EU Commission, the subsidies are anticipated to contribute nearly 4.9 gigawatts (GW) of renewable electricity capacity to Italy's grid. “Under the scheme, the aid will take the form of a two-way contract for difference for each kilowatt-hour of electricity produced and fed into the grid, and will be paid for a duration equal to the useful life of the plants,” stated the EU in a released statement.
Projects will undergo a transparent and non-discriminatory bidding process, where participants will vie for the incentive tariff, or “strike price,” required to execute each project. Italy's significant electricity imports in the previous year, largely attributed to elevated power costs, underscore the necessity for such initiatives.
