Italy's Cabinet approved Tuesday a bill setting the guidelines for changes to the renewable energy incentives system, as part of efforts to reduce the cost to consumers.
Italy's Cabinet approved Tuesday a bill setting the guidelines for
changes to the renewable energy incentives system, as part of efforts to reduce
the cost to consumers.
The bill, if approved by parliamentary committees and
Italy
's
regions, would introduce the changes from 2013. The main objective of the bill
is to scrap the 'green certificates' mechanism, which costs the government
about EUR500 million a year.
Italy
introduced green certificates more than a decade ago as a key component of its
support for green-economy initiatives. Companies can either boost their clean
energy production or buy the certificates.
Under the bill, facilities with a capacity of up to five megawatts will receive
incentives through a tariff feed-in system, while for those more powerful it
will be through an auction.
The aim of the new rules, which still need to be ironed out, is to guarantee
certainties for small investors, while adding more competition for bigger
investors, said the government.
"Our aim is to accompany the development of technology in favor of a
productive mix which is more environmentally-sustainable, at a certainly more
competitive cost," said Industry Ministry Paolo Romani in a statement.
Italy
targets for 17% of its energy consumption to be supplied from renewable sources
by 2020.
In July, energy regulator Alessandro Ortis criticized the country's incentives
system for renewables as inefficient and warned utility bills were in danger of
rising 20% by 2020 if they weren't modified.
The government was keen to note the new regime will take off with an
"adequate" transition period.
The center-right ruling coalition headed by Prime Minister Silvio Berlusconi
caused a stir in June when it emerged the guaranteed purchases of green
certificates would be scrapped to slash costs, bringing investments in the
multibillion-euro sector to a halt. The following month, the government
reintroduced their guaranteed purchase following opposition from investors.
It turned out that, while intended as an incentive, the certificates played a
key role as bank collateral so long as state-run energy management agency GSE
guaranteed a floor price, allowing investors to receive loans based on the
certainty that the GSE would buy any certificates that weren't bought on the
market.
Earlier Tuesday, UniCredit analysts wrote before the government announcement
that their understanding is for the new regulation to especially benefit big
traditional power generation players in the short-term with the decrease of
compulsory green certificates quotas.
On the other hand, renewable companies should rely on the acquisition of the
certificates by the GSE, UniCredit said.
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