Incentives and difference between the authorized and declared power

Italian Supreme Administrative Court - Judgment No. 1228/2022

What happened

The Italian Supreme Administrative Court has reformed the Lazio Regional Administrative Court’s ruling that upheld the measure by which the Gestore dei Servizi Energetici – G.S.E. S.p.A. (“GSE”) denied access to the incentives established by the July 6, 2012 Ministerial Decree for the construction of a new 200 kW wind power plant. The grounds for the denial regards the lack of possession of the connection quote at the time of registration in the Registry.

In the case at stake, the applicant obtained (and accepted) from the grid operator a connection quote for a 900 kW power capacity. However, then the plant had been authorized and built for a capacity of only 200 kW.

Subsequently, the operator applied for registration in the Registry, submitting the connection quote issued for 900 kW. While waiting for acceptance, it asked the grid operator for a downward modification (from 900 kW to 200 kW) of the connection quote.

Nonetheless, the GSE and later the Lazio Regional Administrative Court held that the operator was not in possession of the connection quote at the time of registration in the Registry.

The Italian Supreme Administrative Court argued for the acceptance of the operator’s appeal, underlining that the decrease in power is a permissible and non-substantial change under the January 2014 Application Procedures of the Ministerial Decree of January 6, 2012 (“Application Procedures”). Consequently, this difference, according to the Italian Supreme Administrative Court’s ruling, could not be considered an impediment to eligibility for incentives.

Why is it matters

It is clearly identified the function of the connection quote. The operator’s argument emphasizing its “reservation” function is found to be acceptable. Accordingly, it is stressed that only the case where there is an increase in power is problematic.

In fact, the Italian Supreme Administrative Court underlined that: “since the accepted connection quote has a function of “reservation” of the input power with respect to a grid point (so-called cabin), it is irrelevant in the authorization process that the plant originally assumed for a power (in the case of 0.9 MW) is eventually authorized for lower power (in the case of 0.2 MW), because by physical law a cabin that holds an input of higher power is able to hold a lower power; it would not be so for the reverse case of application for a lower plant and authorization for a plant of higher power”.

Another highlighted aspect is that power decrease is not a “substantial change” within the meaning of the Application Procedures. Consequently, if the power indicated in the connection estimate is greater than the power that has been realized and authorized this does not preclude the plant to be eligible for incentives.