Italy to hold first 500 MW wind-solar auction in January

Italy’s Ministry of Development (MISE) has prepared a new draft decree for the introduction of a new incentive scheme (Decreto Fer), which includes, among other things, a mixed wind-solar auction mechanism for projects over 1 MW, tenders for renewable energy installations up to 1 MW, and new incentives for replacing asbestos roofs with rooftop PV systems.

The government coalition elected in March – the Lega Nord and the Five Star Movement (M5S) – has basically maintained, unchanged, the decree prepared by the previous government right before the end of the legislation. It has, however, added incentives for the removal of asbestos, while also postponing the launch of the first mixed wind-solar auction from November to January.

Wind-solar auctions for large-scale projects

According to the new draft decree, which pv magazine gained access to, the number of wind-solar auctions for projects exceeding 1 MW in size (category A), remains at seven, with the first scheduled to be launched on January 31, 2019, and last on January 31, 2021.

Overall, through these auctions, around 4.8 GW of renewable energy capacity will be contracted. The first two auctions will each see around 500 MW of capacity allocated, while from the third to the fifth, each new tender will assign 700 MW. Furthermore, in each of the last two auctions, the contracted capacity will reach 800 MW.

The new auction mechanism will also be open to power projects over 1 MW, relying on different renewable energy technologies (category B), which are expected to see a total share of just 140 MW, while being selected in separate auctions.

Furthermore, MISE confirmed it is planning to tender 490 MW for existing renewable energy power plants that will be partially or entirely retrofitted (category C), provided these plants have surpassed at least two thirds of their life-cycle, and are not currently receiving incentives.

Tenders for solar and renewables up to 1 MW

The new decree has also confirmed the general thrust of the tenders for renewable energy projects with a capacity of 20 kW to 1 MW. A first series of tenders will be devoted to wind and solar power projects (A Group) and will have a combined capacity of 650 MW.

A second series (B Group), which was not included in the previous decree will be devoted to rooftop PV projects linked to the removal of asbestos covers. Projects selected through these tenders, which will have an aggregate capacity of 700 MW, will be granted an additional premium tariff of €12/MWh.

Another series (C Group) will include hydropower and other minor renewable sources, and will see the allocation of just 70 MW, while the fourth category (D Group) also with only 70 MW of contracted power, will be devoted to projects utilizing retrofitted components.

For all of the four categories, the Italian government has decided to prioritize projects that will be linked to EV recharging stations – a measure that was not included on the provisions set by the previous government.

The new decree must now be approved by the relevant Italian authorities, and then be submitted to the European Commission for final approval.

When implemented, this new auction scheme will revive the large-scale solar segment in Italy, which saw only a small resurgence in recent months, thanks to the private PPA segment.

Most of the around 19.7 GW of installed PV capacity in the country is represented by MW-sized PV projects developed under the five Conto Energia FIT schemes.