Italy's biggest utility Enel SpA (ENEL.MI) expects the government to soften plans to cut public incentives for renewables, Chief Executive Fulvio Conti said Tuesday, after lawmakers shocked the sector last month with proposed austerity measures that could halt investment across the sector.
Italy's biggest utility Enel SpA (ENEL.MI) expects the government to
soften plans to cut public incentives for renewables, Chief Executive Fulvio
Conti said Tuesday, after lawmakers shocked the sector last month with proposed
austerity measures that could halt investment across the sector.
"I think the indication we got is that the government is seriously
considering the modification of that article 45 [of the government budget
law]," said Enel's CEO at a conference in
Moscow
.
The measure was packed into
Italy
's
austerity budget and relieves the state-run energy management agency, GSE SpA,
from its role as the buyer of last resort for green certificates issued to
support development of renewable energy.
Even though the decree introducing the change still has to be approved by
parliament, prices have collapsed in the EUR7.5 billion renewables market since
it was promulgated late last month.
The government plans are a "tough blow" to the sector, said
Alessandro Marangoni, head of Italian energy consultancy Althesys Srl. "Growth
in the renewables sector is now at risk."
Italy
is
among the latest European countries to announce measures to reduce subsidies
for renewable energy. The governments' cuts seek to save public money amid
broader budget cuts, or to lower energy costs in the hope of boosting consumer
spending.
Spain
and
Germany
have
taken such steps.
Enel has developed a "strong presence" in
Italy
's
renewables market, CEO Conti said in
Moscow
. "It
would make send to maintain that."
The subsidies are also seen as necessary to allow
Italy
to
meet an EU target of generating 20% of electricity from renewable sources by
2020.
The Enel CEO said he expects "intense discussion" on the issue as
Italy
needs
to comply with EU carbon emission limits.
Still, Conti said he doesn't forecast any "specific worry" for its
multibillion-euro initial public offering for renewables unit Enel Green Power
SpA planned for October.
In the longer term, Enel expects government subsidies to decline as advances in
technology allow the industry to produce cheaper power, Conti said.
Energy investors are also waiting for the government's new 2011-2014 incentives
for solar power producers. The government has said a cut is expected to take in
consideration lower costs for technology to generate electricity.
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