Italian and EU wind energy associations have criticised a new Italian law introducing clawback measures on renewable energy facilities including merchant wind farms, claiming it will lead to market distortions and lasting damage to EU climate and energy market goals.
Article 16 of Italian decree no. 04/2022 introduces a fixed reference price, from 1 February to 31 December 2022, which is based on historical average zonal electricity prices in Italy.
This will “lead to significant wholesale energy market distortions”, interfere with EU rules on electricity price formation and set “a de facto unavoidable and administratively determined strike price for any possible future power purchase agreements (PPAs)”, according to a statement by a number of Italian and European renewable energy associations including WindEurope.
“These complex and discriminatory measures will jeopardise the Fit-for-55 [EU climate] targets,” the statement continues, adding that the measures will also damage investors’ confidence in renewable energy and undermine the correct functioning of the EU's internal electricity market.
The new law was introduced to limit the negative impacts of rising energy prices — a significant problem across Europe due to a sharp increase in the price of gas. It is set to be fully adopted within 60 days, but could be withdrawn before then, a WindEurope spokesman advised.
Similar regulatory interventions were proposed in Spain last September, leading to “significant regulatory instability and far-reaching changes in the dynamics of contracts”, the statement continues. This culminated in the original measures being drastically revised.
WindEurope and the other organisations suggest that Italy should instead “accelerate and simplify permitting procedures in order to install at least 8GW of new renewable capacity every year until 2030”. In reality, less than 1GW/year has been installed in recent years, they point out.
They called for Italy to withdraw the law and start “a constructive dialogue to define effective and balanced solutions to tackle the energy price rises”.
Wind power won less than 400MW of capacity in Italy’s latest auction, which was for 3.3GW, with Italy’s complex permitting system being blamed for the dearth of bids.
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