Draft Decree Implementing Legislative Decree 199/2021 on Suitable Areas

1. Introduction

This document aims to provide a summary of the regulations on identification of suitable areas included in the draft decree implementing Legislative Decree 199/2021 and addresses the most significant issues for those who intend to develop projects for the installation of renewable energy source (“RES”, in Italian “FER”)- based systems in the national territory[1].

2. Purposes of the Guidelines

A draft implementing decree was prepared, in implementation of Article 20, paragraphs 1 and 2 of Legislative Decree 199/2021, containing guidelines (“Guidelines”), several versions of which were circulated, one dating back to July 2023 and the most updated one dated September 2023, for identification of the Suitable Areas (“Suitable Areas”) for the installation of RES-based plants. More specifically, such decree establishes the principles for identification of Suitable Areas in order to achieve the goal of installing an additional 80 (eighty) GW power from RES throughout the national territory by 2030 (Article 1 of the Guidelines).

In this regard, Article 2 of the Guidelines includes a table showing the regional minimum power allocation for each year from 2023 to 2030.

Once the decree comes into force, the Regions will have to enact a law for the identification of the Suitable Areas according to the criteria set out by the Guidelines.

3. Types of areas and criteria for the identification of the Suitable Areas

The Guidelines divide the areas into three different categories:

a) Suitable Areas;

b) unsuitable areas; and

c) so-called “ordinary” areas.

As far as Suitable Areas are concerned, Article 8 of the Guidelines includes  the criteria that Regions should take into account for their identification. Specifically, point e) of such article provides that specific criteria are identified to qualify as Suitable Areas:

• areas including water storage reservoirs and artificial canals for hydraulic defence of land;
• brownfield and divested industrial areas as well as other impaired areas, abandoned and marginal areas such as, by way of example, unclassified areas, used for unlawful activities, unproductive land, mines and quarries, landfills, contaminated areas, former military areas.

Furthermore, under point f) of the same article, Suitable Areas are deemed:

• sites where plants of the same source are already installed and where changes are made for upgrade or reconstruction purposes, possibly combined with storage systems, which, in any event, do not involve changes in the area concerned greater than 20% (twenty percent). Such limit does not apply to photovoltaic systems (“PV Systems”) installed on areas classified as agricultural areas, enclosed in a perimeter whose points are no more than 500 (five hundred) meters away from industrial, artisanal and commercial use areas, including sites of national interest, as well as quarries and mines pursuant to Article 20, paragraph 8, letter c-ter), number 1, of Legislative Decree 199/2021;
• sites subject to reclamation under Legislative Decree 152/2006;
• quarries and mines that have ceased, have been abandoned and are not suitable for further exploitation;
• sites and plants available to Ferrovie dello Stato, managers of railway infrastructures, highway concession companies and airport management companies included in airport property;
• without prejudice to the preceding points, areas that neither fall within the scope of property to be protected under Legislative Decree 42/2004 (“Code of Cultural Heritage”) nor within the buffer area intended for protection of the assets to be protected under second section or Article 136 of said Legislative Decree. For the sole purposes of this point, the buffer area is 3 (three) kilometres for wind power plants and 500 (five hundred) metres for PV Systems;
• property in the military domain, property in the State domain or for any reason used by the Ministry of the Interior, property identified by the Agenzia del Demanio (State Property Agency);
• areas of the buildings, facilities and artifacts on which PV Systems are built, as well as the areas for the construction of works functional to the connection to the electricity grid, if falling among the types for which the ordinary maintenance regime is applicable pursuant to Article 7-bis, paragraph 5, of Legislative Decree 28/2011.

Only with regard to PV and biomethane production plants, in the absence of constraints under second section of the Cultural Heritage Code, the following areas are deemed suitable (so-called solar belt):

• agricultural areas enclosed in a perimeter whose points are no more than 500 (five hundred) meters away from any industrial, craft and commercial areas, including sites of national interest, as well as quarries and mines;
• areas inside industrial plants and factories under Legislative Decree 152/2006, as well as agricultural areas enclosed in a perimeter whose points are no more than 500 (five hundred) meters away from the same plant or factory;
• areas adjacent to the motorway network within a distance not exceeding 300 (three hundred) metres.

For wind power plants, without prejudice to the provisions of Article 8, paragraph 1, (f)  of the Guidelines, Suitable Areas shall be identified based on the assessment of adequate windiness of the area. For such purposes, the Guidelines, in the version circulated in September 2023, classify as “adequate” a windiness such as to ensure a producibility greater than 2,150 (two thousand one hundred and fifty) hours equivalent to 100 (one hundred) metres in height, as opposed to the 2,250 (two thousand two hundred and fifty) hours envisaged, on the contrary, by the draft circulated in July 2023.

Unsuitable areas are, on the other hand,  the sites deemed unsuitable for the installation of specific types of plants. In this regard, the Guidelines provide that Regions and Provinces, where necessary, must update the list of unsuitable areas identified in accordance with the criteria set out in Annex 3 of the guidelines for the authorization of plants powered by renewable sources introduced by the Ministerial Decree of 10 September 2010, as amended and supplemented.

Finally, the draft decree classifies ordinary areas as those areas that do not fall into any of the categories under (a) and (b) above and are subject to application of the authorisation regimes set out in Legislative Decree 28/2011.

4. Percentage limits on the installation of plants on suitable agricultural areas

As far as suitable agricultural areas are concerned, point g) of Article 8 provides that  PV Systems may cover a maximum percentage of no less than 5% (five per cent) and no more  than 10% (ten per cent) of the agricultural land available  to the party carrying out the work. The draft Guidelines, in the July 2023 version, provided for such percentages to be doubled (i.e. no less than 10 percent and no more than 20 percent) with respect to plants classified as (non-advanced) agrivoltaic under the Guidelines of June 2022 on agrivoltaic systems (“Agrivoltaic Guidelines”);

The draft Guidelines, updated September 2023, on the contrary, provide for the 5% (five percent) - 10% (ten percent) limit on availability of agricultural land to apply not only to so-called “standard” PV systems but also to (non-advanced) agrivoltaic ones, thus excluding, for the latter, the possibility of benefiting of preferential percentages. On the other hand, such latest draft also introduces the novelty of eliminating such percentage limits in the event that standard PV systems and (non-advanced) agrivoltaic systems  are built on unused agricultural land.

The other provisions included in point g) of Article 8 remained unchanged, which lay down that percentage limitations:

• do not apply for the so-called “advanced” agrivoltaic systems, i.e. systems built pursuant to Article 65, paragraph 1-quater of Decree Law 1/2012;
• do not apply for the installation of RES-based systems in the areas referred to in point e) of Article 8 of the Guidelines (reservoirs, artificial canals, divested industrial areas, impaired areas), which therefore cannot be used for agricultural activities; and
• higher percentages of use may be established in the case of land classified as agricultural but actually unused.

Moreover, the September 2023 draft provides, in Article 7, paragraph 1, point b), that solely for the purpose of installing advanced agrivoltaic systems, in addition to agricultural areas classified as PDO (DOP) and PGI (IGP), already included in the former draft, also areas classified as TSG (STG), DOC, DOCG, organic production and traditional production are to be considered suitable.

For the sake of clarity, systems classified as (non-advanced) agrivoltaic are those that meet requirements A, B and D.2 of the Agrivoltaic Guidelines and that, at present, cannot benefit from incentives if they are installed on areas used for agricultural purposes. In a nutshell, such requirements are:

• requirement A, which is met when at least 70% (seventy per cent) of the area concerned by the work is intended for agricultural activities and when the percentage of the total area covered by the modules (“LAOR”) does not exceed 40% (forty per cent) of the total area concerned by the work;
• requirement B, which concerns the value of agricultural production, the continuation of the production activity and the minimum electricity production, which cannot exceed 60% (sixty per cent) of that of a standard photovoltaic system; and
• requirement D.2, which concerns the implementation of a monitoring system with reference to the continuity of the agricultural activities referred to in the previous point.

“Advanced” agrivoltaic systems means those systems that not only meet the requirements listed above, but also requirements C (minimum height of the modules from the ground) and D.1 (monitoring system for water saving).

Upon reaching a maximum exploitation percentage no lower than the values indicated in column A of the Table in Annex 1 of the Guidelines, which specifies the minimum and maximum targets for the development of photovoltaic systems in agricultural areas, and no higher than the values indicated in column B of the said Table,  Regions are allowed to classify the remaining agricultural areas as areas not suitable for the construction of PV systems. Such limitation shall not apply to advanced agrovoltaic systems.

5. Preliminary observations

First of all, the meaning of “availability” to the party carrying out the work is not clear with reference to the percentage limits of land use and, in particular, with reference to the areas not concerned by the work. In other words, it is not clear whether the lawmaker requires holding a property right, right of superficies, leasehold right or a simple negative easement preventing the construction of facilities of the same kind. In such respect, considering the experience to date in Emilia-Romagna, where such percentage limits were already in force, we hope that obtaining a simple negative easement in relation to areas not concerned by the work will be deemed sufficient.

Secondly, it should be noted that Article 8 of the Guidelines indicates as suitable some of the examples of areas mentioned also in Article 22-bis of Legislative Decree 199/2021, namely, the areas of buildings, facilities and artifacts as well as the areas for the construction of works functional to the connection to the electricity grid. However, industrial, craft and commercial areas, landfills or landfill lots closed and restored, quarries or quarry lots or portions not suitable for further exploitation, although in turn mentioned in Article 22-bis of Legislative Decree 199/2021, are not expressly referred to in the Guidelines. The reason for such omission is not clear, since in all the areas listed in Article 22-bis of Legislative Decree 199/2021 the construction of photovoltaic systems is allowed without the prior acquisition of permits, except for possible environmental assessments, since it is considered as ordinary maintenance. It would therefore be appropriate, precisely because of the supposed attempt to facilitate the installation of renewable systems, for the decree to indicate all the sites listed in Article 22-bis of Legislative Decree 199/2021 as suitable areas.

Furthermore, the Guidelines do not specify which plant components must be in the suitable areas in order for the plant to benefit from any favourable regimes, in other words, it is not clear whether it is sufficient for only modules and inverters to be in such an area or whether it is necessary for the grid connection works to be included as well.

As regards, instead, the temporal scope of application, apparently the lawmaker is exempting only those authorisation procedures commenced before the entry into force of the regional laws implementing the Guidelines and concerning suitable areas pursuant to Article 20, paragraph 8, of Legislative Decree 199/2021, i.e. those areas that are “immediately” suitable. It follows that the aforesaid regional rules should be immediately applicable also to all the other authorisation procedures that will be in progress at the date of entry into force of such rules.

In addition, the market negatively responded the intention to introduce the above-mentioned limits to land occupation.

At present, the status of Suitable Area is mainly relevant for the possibility, reserved to PV systems to be installed on such areas, to be granted access to less burdensome authorisation procedures and, in particular, to the simplified authorisation procedure (“PAS”) referred to in Article 6 of Legislative Decree 28/2011, whose paragraph 9-bis provides that in Suitable Areas it is possible to authorise PV systems up to 10 MW by means of a PAS (and not by means of single authorisation pursuant to Legislative Decree 387/2003). As regards incentives, to date, the only mechanism currently in force for PV is still the one laid down in the Ministerial Decree of 4 July 2019 (“FER I”) implementing Legislative Decree 28/2011, where the status of Suitable Area is irrelevant.

However, in perspective, Suitable Areas will also be relevant with reference to the possibility to access future incentive mechanisms that will be implemented pursuant to Legislative Decree 199/2021. In particular, as an exception to the prohibition set out in Article 65, paragraph 1 of Decree Law No. 1/2012, systems installed on agricultural areas will also be able to access the aforesaid incentives, provided that such areas are unused and provided that they have the status of Suitable Areas. However, with regard to the latter, the lawmaker does not clarify the time period after which an agricultural area can be considered unused and which requirements must be met in order for it to be classified as such. In Article 10 of Legislative Decree 28/2011, a provision that has now been repealed, the lawmaker provided a derogation to the access of incentives for PV systems in agricultural areas in the event of land “abandoned for at least 5 (five) years”. Therefore, not only is it not clear when an area can be considered unused, but in light of the aforementioned provision, the term “unused” is ambiguous, since it does not clarify whether or not it coincides with the qualification of “abandoned land” already used in the past by the lawmaker.

Moreover, again with a view to the future, the status of Suitable Area will make it possible to obtain a reduction in terms of the time required for the authorisation, as well as the non-binding nature of the opinion of the competent Superintendency, where required.

Finally, although the Guidelines provide for a favourable treatment for advanced agrivoltaic systems, the September 2023 version apparently eliminates any kind of benefit for simple agrivoltaic systems as they are essentially equated with standard PV systems.

In conclusion, all that remains to be done is to wait for future developments regarding the ongoing interlocution between the State and the Regions[2] to assess which new limits will actually burden the possibility of developing photovoltaic systems and, in general, RES-based systems in Italy.

This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For any further information please contact Piero Francesco Viganò, Ernesto Rossi Scarpa Gregorj and Elisa Maria Babbini.

[1] This document should not therefore be considered exhaustive, taking into account that specific assessments will be necessary from time to time depending on the characteristics of the individual project and/or business case concerned. It should also be noted that the contents of this document may change as regulations evolve. Therefore, we invite you not to fully rely on this document for specific projects and cases, but to consider it as intended to provide only a summary of the regulation as of the date of the drafting thereof.

[2] Indeed, the Guidelines are currently being examined by the Unified State-Regions Conference.