European Commission greenlights $39B Italian renewable energy aid project.

By Oliver Townsend Jun 7, 2024
European Commission Approves $39B Italian Renewable Energy Aid Scheme.webpOrginal image from: https://www.rigzone.com/news/european_commission_approves_39b_italian_renewable_energy_aid_scheme-07-jun-2024-177011-article/

The European Commission has recently given approval to a $39 billion Italian aid scheme aimed at boosting renewable energy production. This scheme aligns with the objectives of the European Green Deal and is set to run until December 21, 2028. The aid will be funded through a levy included in consumers’ electricity bills and is expected to increase electricity production from renewable sources by 4,590 megawatts.

European Commission Approval

The European Commission’s approval of the Italian aid scheme falls under EU State aid rules. The scheme will support the construction of new plants utilizing innovative technologies such as geothermal energy, offshore wind power, thermodynamic solar, floating solar, tidal, wave, biogas, and biomass. Projects based on these technologies could start operating within 31 to 60 months, depending on the specific technology.

The aid scheme is crucial for Italy to meet both European and national climate targets. The European Commission highlighted that the aid provided is limited to the minimum required to stimulate investments, ensuring proportionality. Additionally, safeguards such as a competitive bidding process and a two-way contract for difference mechanism have been put in place to prevent distortions of competition and maintain long-term price stability.

Supporting Renewable Electricity Production

The approved scheme enables Italy to promote the production of renewable electricity from various technologies, including innovative ones. By supporting emission reduction and electricity production targets, the scheme aligns with the European Green Deal objectives. The aid also has an incentive effect, as beneficiaries would not undertake the same level of investments in renewable plants without public support.

Executive Vice President’s Statement

Margrethe Vestager, the executive vice president in charge of competition policy, praised the scheme for its contribution to emission reduction, electricity production targets, and the European Green Deal objectives. Vestager emphasized the importance of limiting competition distortions while supporting renewable energy production through innovative technologies.

Conclusion

The European Commission’s approval of the Italian renewable energy aid scheme signals a significant step towards achieving climate targets and promoting sustainable energy production. With a focus on innovative technologies and stringent safeguards in place, the scheme is expected to drive investments in renewable energy projects and contribute to the broader goals of the European Green Deal.

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