Italian Government Proposes Geothermal Concession Extensions and Environmental Fund

Giorgia Meloni. Credit: Wikipedia

In a bid to bolster the nation's energy security, the Italian government, led by Prime Minister Giorgia Miloni, is poised to convene today to deliberate and approve a series of “urgent measures.” Among these measures is a proposal to extend concessions that were previously slated to expire in the near future.

Under this proposal, the geothermal concessions would see an extension, stretching until December 31, 2026, as opposed to the initially planned cutoff date in 2025. However, the decree also introduces a caveat, allowing for a further extension, conditional upon the submission and approval of multi-year investment plans.

These investment plans, which may be requested by the relevant authority from the outgoing concessionaire, are required to encompass several key elements, including:

  1. Maintenance and technological enhancements.
  2. Measures to counteract the natural decline of the geothermal field.
  3. Initiatives promoting environmental sustainability.
  4. The construction of new production facilities and mining activities.
  5. Strategies to boost employment levels in areas impacted by the cultivation concessions.

The competent authority is obligated to assess these plans within 30 days of their submission or within 15 days if a modified or augmented plan is presented. Subsequently, a decision will be reached regarding the revision of the existing concession's conditions, with a maximum extension not exceeding 20 years.

Additionally, the Energy Decree introduces a noteworthy provision for environmental and territorial compensation and rebalancing. It allocates EUR 200 million euros annually from 2024 to 2032. These funds will be distributed among various regions and autonomous provinces to support decarbonization and the sustainable development of their territories, particularly in light of the increasing concentration of production from renewable sources. These funds will be financed through the proceeds generated from carbon dioxide emission quota auctions.

For power supply, the decree imposes a requirement on owners of electricity production plants with a capacity exceeding 20 kW and constructed between January 1, 2024, and December 31, 2030. These plant owners will need to pay an annual contribution of 10 euros per kilowatt of power for the initial three years following their operation to the Energy Services Manager (GSE).

Notably, energy company Green Power (Enel) had previously announced a significant EUR 3 billion investment plan in 's geothermal sector. This initiative includes the construction of two new plants by 2030 with a combined installed capacity of 200 MW. However, the realization of this investment is contingent upon the extension of the company's existing geothermal concessions in Tuscany, which had previously been granted a one-year extension.

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