Results of the first auction under the new Italian renewables subsidy were announced on 28 January by Gestore dei Servizi Energetici (GSE) – the country’s energy agency. The format of the auction provides top-up premia for generators, with developers bidding reductions of between 2% to 70% against a reference price of €70/MWh (£59.40/MWh).
The below graph highlights the successful capacity in the auction and shows that just one solar PV project was awarded a subsidy.
Tom Andrews, Senior Analyst at Cornwall Insight, analyses the latest results and what this means for the future of solar PV in Italy.
“The inaugural subsidy auction saw 459MW awarded to onshore wind generation, with just a single 5MW solar PV installation also securing subsidy. 19 sites were successful in total, and prices range from €66.50/MWh down to €48.65/MWh, with a weighted average of £57/MWh (£48.40/MWh).
“The news that just a single 5MW solar PV installation secured a subsidy in the auction will no doubt be disappointing, particularly when considering Italy’s ambitious solar goals. However, it may be a sign of solar thriving in a subsidy-free world.
“In fact, December 2019 alone saw seven new unsubsidised plants commissioned with a total of 70MW. These were built by Octopus Renewables and located on sunny Sardinia. The investments were underpinned by Power Purchase Agreements with EGO Group and Shell Energy Europe.
“The developers successful in this auction will now have 31 months to construct and commission their generators to receive subsidy payments.”
Italian energy fundamentals: focus on subsidy-free solar webinar
We’re holding a free webinar on opportunities in the Italian energy market on 12 March where Cornwall Insight and external market experts will give insight into the current state of the energy markets, including a Q&A panel discussion. To take part, contact Tom Andrews on t.andrews@cornwall-insight.com or sign up here.
