The new issue of Energy Law Italy Outlook is now available online. Prepared by ADVANT Nctm's Energy & Infrastructures Team, the newsletter explores the most significant legislative and regulatory developments shaping Italy's energy sector.

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These developments supplement the provisions already set forth in Decree No. 152 of 20 June 2025, adopted by the Ministry of the Environment and Energy Security (“MASE”) and the Ministry of Economy and Finance (“MEF”), in compliance with the provisions of Article 28, paragraphs 2 and 2-bis, of Legislative Decree No. 199/2021, which provided specific guidelines to Gestore dei Mercati Energetici S.p.A. (“GME”) for the establishment of a new organised market dedicated to the negotiation of PPAs (the “MPPA”) and determined the criteria and conditions under which the GSE may assume the role of guarantor of last call for PPAs negotiated on the MPPA.

Between July and August 2025, GME and GSE concluded two public consultations concerning, respectively, (i) the proposed operating model for the MPPA (the “Operating Model”) and (ii) the proposed operational rules for the qualification of entities intending to participate in the MPPA and for the regulation of the GSE's guarantee of last call (the “Operational Rules”). Notwithstanding the closure of both consultations, the Operating Model and the Operational Rules have not yet been officially published.

The new section of the Bacheca PPA

Pursuant to the regulations published by GME (the “Bacheca PPA Regulations”), the Bacheca PPA is divided into three separate sections: the announcements section, the contract registration section and the energy release section.

Within the announcements section, operators interested in executing long-term contracts for the purchase or sale of electricity from renewable energy sources may publish their announcements on an anonymous and non-binding basis. Among the other characteristics that the contracts forming the subject matter of such announcements must satisfy, pursuant to the technical operating provisions of the Bacheca PPA published by GME, there is the requirement of a minimum duration of no less than 5 years.

Article 4(1)of the DL Bollette provides that the Bacheca PPA shall be implemented through the introduction of a new section specifically dedicated to the execution of contracts which, on the purchase side, (i) shall have a minimum duration of no less than 3 years and (ii) may also be negotiated in aggregate form, based on location, consumption profile or membership of specific industry sectors. On the supply side, the electricity traded under such contracts shall not be, or become, subject to support mechanisms for the production of energy from renewable sources.

Such agreements are executed between the parties outside the Bacheca PPA – also with the advice of the GSE – and are subject to a mandatory registration obligation on the relevant section of Bacheca PPA.

The extension of the role of the GSE as guarantor of last call

Article 4(2) of the DL Bollette provides that the parties may request the GSE to assume the role of guarantor of last call also in relation to contracts entered into through the new section of the Bacheca PPA. To this end, the GSE shall identify forms of risk minimisation and transfer for the contracting parties within the scope of the defined contract typologies, including by availing itself of SACE S.p.A.

In particular, for the portion exceeding the available resources and only once the financial resources allocated to the guarantee of last call pursuant to Article 28, paragraph 2-bis, of Legislative Decree No. 199/2021 have been exhausted, SACE S.p.A. is authorised to issue guarantees in favour of the GSE at market conditions, for a maximum coverage percentage not exceeding 70 per cent.

Within 90 days from the date of entry into force of the DL Bollette, MASE and MEF are expected to approve the operational rules, as proposed by the GSE, to implement the foregoing with reference to, among others things, (i) the requirements to be satisfied for benefiting from the access to the guarantee of last call as well as (ii) the standard form of the contracts to access to the guarantee of last call service (the “New Operational Rules”).

The requirements for access to the guarantee of last call

The Operating Model and the Operational Rules states subjective requirements for participation in the Electricity Market and for the assumption by the GSE of the role of guarantor of last call in the MPPA that are particularly onerous.

Indeed, all participants in the MPPA, in addition to being entities duly registered as “attive” with the competent chamber of commerce and holding a rating no lower than the investment grade, shall:

1. obtain the qualification as market operators pursuant to the rules governing the Electricity Market (GME), satisfying all relevant requirements thereunder;

2. be balance responsible party of one or more renewable energy production plants that have entered into operation or have been authorised, if acting as sellers (GSE);

3. be balance responsible party of one or more offtake points, as defined in the TIT, if acting as purchasers (GSE).

As previously noted, such requirements and the related burdens (including in terms of professional qualifications and guarantee instruments) for participation in the Electricity Market and, thus, in the MPPA, may constitute an obstacle to accessing the guarantee of last call provided by the GSE, both for the special purpose vehicles that typically hold the production plants and for energy-intensive companies.

However, the Bacheca PPA and the possibility of accessing the last call guarantee instrument provided by the GSE also for contracts entered into through the Bacheca PPA may enable operators to overcome such obstacle.

Indeed, the Article 14 of the Bacheca PPA Regulations provides that the entities - which intends to participate to the Bacheca PPA - shall only have adequate professionalism and competence in the use of electronic systems and security systems, without any additional or different requirements and/or the provision of specific guarantee instruments in favour of GME, as is the case for adhesion to the Electricity Market and the MPPA.

A significant development

The provision introduced by Article 4 of the DL Bollette could, therefore, represent a significant instrument for overcoming the obstacles – at least with regard to subjective requirements – that precluded the access to the MPPA and to the GSE’s guarantee of last call, thereby enabling also those entities lacking the requirements set forth in Operating Model and the Operational Rules to benefit from the guarantee mechanism provided by the GSE.

Nonetheless, through the Bacheca PPA, only physical power purchase agreement may be entered into, with the exclusion of virtual contracts (so-called virtual PPAs) which, in light of their growing relevance in market practice, should likewise have access to such guarantee instrument.

Therefore, it will be necessary to await the publication of the New Operational Rules – or the revision of those already submitted for consultation – in order to ascertain whether the facilitations to access to the guarantee instrument set out above are effectively endorsed by the regulator and, consequently, whether the new subjective requirements for access to the Bacheca PPA will allow for an effective utilisation of the instrument, in line with the objective of promoting the long-term contracting of electricity produced from renewable energy sources.

1. ^ To this extent please see our previous article:https://www.advant-nctm.com/news-e-approfondimenti/il-mercato-organizzato-dei-ppa-in-italia-e-la-garanzia-di-ultima-istanza-del-gse 
2. ^ Within the framework of which seller operators fulfill the obligation to register long-term power purchase agreements (PPAs) for electricity generated from renewable sources that they have entered into, it being understood that the relevant contracts are signed outside the Bacheca itself.
3. ^Within the framework of which purchase offers may be submitted for the electricity made available by the GSE under the Energy Release 1.0 mechanism.
4. ^www.mercatoelettrico.org/Portals/0/Documents/it-IT/20250127DTF05rev3PPA.pdf
5. ^To this extent please consider our previous article, available at the following link:https://www.advant-nctm.com/news-e-approfondimenti/il-mercato-organizzato-dei-ppa-in-italia-e-la-garanzia-di-ultima-istanza-del-gse

The dispute arose from the failure to submit the final commissioning certificate relating to the plant built under two Simplified Authorisation Procedures (PAS). According to the authorities, such omission justified both the imposition of an administrative fine and the restoration measure.

The judgment addresses several key issues concerning the legal framework governing the PAS regime.

First, the Council of State confirms that the PAS falls within the SCIA (Certified Notice of Commencement of Activity)model. In doing so, the Council emphasises both its historical derivation from the former DIA (Declaration of Commencement of Activity) regime and the structure of administrative control, which may be exercised within thirty days following the filing of the notice. The expiry of such period does not give rise to any implied administrative authorisation; rather, it produces the typical effect associated with the SCIA regime: the private party is entitled to lawfully commence the declared activity in the absence of timely objections.

The principles affirmed by the Council of State are consistent with a series of recent rulings by Regional Administrative Courts, including:

• judgment No. 495 of 30 April 2026, whereby the Regional Administrative Court of Lazio (Latina) confirmed that, once the thirty-day period has elapsed without notification of an order prohibiting the works, the activity must be deemed definitively authorised. The exercise of administrative review powers requires the existence of a specific public interest going beyond the mere restoration of legality, as well as an effective balancing of interests taking into account the private party’s legitimate expectations;

• judgment No. 59 of 14 January 2026, whereby the Regional Administrative Court of Puglia (Lecce) annulled both the rejection order — issued after the expiry of the thirty-day period, when the authorisation process had already become effective — and the subsequent annulment measure adopted in the exercise of administrative review powers, without the necessary assessment of public interest and without taking into account the applicant’s business interests;

• judgment No. 474 of 1 April 2026, whereby the Regional Administrative Court of Lombardy (Brescia) upheld an operator’s appeal, clarifying that the alleged lack of a qualifying requirement (i.e. the availability of the relevant areas) should have been raised within the thirty-day limitation period.

Second, the judgment clarifies that the three-year period under Article 6(6) of Legislative Decree No. 28/2011 runs from the effectiveness of the PAS and relates to the material completion of the works. Failure to comply with such deadline affects only the possibility of continuing works that have not yet been completed; it does not render unlawful works already carried out in compliance with the authorisation. This interpretation is consistent with the distinction drawn by the Plenary Assembly of the Council of State in decision No. 14/2024 between incomplete works with functional autonomy and works radically departing from the approved project.

Third, the judgment addresses Article 44(2) of Legislative Decree No. 28/2011. The Council of State held that restoration measures apply solely to the specific cases expressly set out in the provision — namely, the total absence of the PAS or non-conformity of the works — and cannot be extended by analogy. Failure to submit the commissioning certificate, while constituting a breach of the obligation under Article 6(8), cannot be equated with the absence of the authorisation nor result in its lapse, since the commissioning certificate serves a certifying function but is not constitutive in nature. This reasoning is further supported by comparison with Article 23(7) of Presidential Decree No. 380/2001, which sanctions the failure to file the commissioning certificate for works subject to the alternative SCIA procedure with an administrative fine rather than demolition.

1. * * *

Once again, it is the administrative courts — and not the competent authorities — that act as “guardians” of the decarbonisation objectives underlying the regulatory framework governing renewable energy sources. 

Indeed, while case law is progressively shaping a framework of legal certainty, recognising the stability of authorisations and confining the exercise of prohibitive and sanctioning powers within the limits of the law, administrative authorities continue, all too often, to adopt restrictive measures based on broad interpretations of the applicable rules, effectively hindering the development and operation of renewable energy plants.

The result is a paradox: the energy transition, which the legislator sought to promote through the simplification of authorisation procedures, ultimately relies not on administrative action, but on the corrective function of the courts.

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The electrification of port quays, known as “cold ironing”, falls within the broader objective of “sustainable mobility” and aims to reduce the negative externalities arising from the use of fuels during the stationary phase of vessels in port.

An initial regulatory framework for the system was established by Article 34-bis of Decree-Law No. 162 of 30 December 2019, as subsequently amended by Law No. 214 of 30 December 2023, which defined cold ironing as “the set of structures, works and installations built on land necessary for the supply of electricity to vessels moored in port”, further qualifying it as a service of general economic interest.

Within this context, the recent Decree of the Minister of Infrastructure and Transport No. 10 of 22 January 2026 (hereinafter, the “MIT Decree”) was adopted to provide the Port System Authorities with specific guidance on the management of cold ironing services and to ensure full compatibility of the tariff relief measures with Article 107 of the TFEU, in compliance with the European Commission Decision of 17 June 2024, C/2024/3934.

2. On the authorization regime: the regional single authorization

Pursuant to Article 33 of Decree-Law No. 36/2022, port electrification projects have been classified as programs “of public utility,” subjecting their construction and operation to the issuance of a single authorization by the competent region, in compliance with the regulations in force concerning the protection of the environment, landscape and historical-artistic heritage, with the aim of simplifying the procedures for the construction of the infrastructure necessary for the system.

The single authorization is issued upon conclusion of the conference of services convened by the Port System Authority or the competent region, with the participation of all relevant administrations, within a maximum period of one hundred and twenty days, or one hundred and eighty days where an environmental impact assessment (“EIA”) procedure or a screening for EIA (“EIA Screening”) is required.

With regard to the applicability of EIA, it is considered that the project must follow the ordinary rules of the Environmental Code (Legislative Decree No. 152/2006), where the individual interventions fall within those listed in Annexes II, II-bis, III and IV to Part II of the same Code.

3. On the regulatory framework: system charges and the relief regime

The issue of general system charges (hereinafter, “GSCs”) represents the central element of the advantageous regime granted to the cold ironing system: by ARERA Resolution 492/2024/R/eel of 29 November 2024, the provisions of Article 34-bis, paragraph 1, of Decree-Law No. 162/2019 were implemented, concerning “reductions on general system charges for electricity drawn from cold ironing infrastructure”.

The extent of the reduction amounts, for consumption in the years from 2025 to 2029, to 100% of the GSCs owed by the Cold Ironing Infrastructure Manager (“IM”), with a proportional reduction in cases where the POD is not exclusively dedicated to the supply of cold ironing infrastructure. The MIT Decree further specified the operational modalities of the regime: from 1 January 2030, the relief measures shall be granted only to vessels and in ports not subject to the obligations respectively provided for by EU Regulation 2023/1804 and EU Regulation 2023/1805, in order to limit the incentive to those cases where it is necessary to steer the conduct of operators.

The relief measures must be transferred in full to the end users of the cold ironing service, and the IM shall recognize, on a final settlement basis, any credits not passed on through the tariff, in the form of an adjustment or discount on subsequent supplies. A safeguard clause on State aid is also provided: the relief measures may not be granted to undertakings in difficulty or subject to a pending recovery order, for which purpose a self-certification shall be obtained from the beneficiary.

4. On the Cold Ironing Infrastructure Manager (IM) and the procedures for the award of the service

The IM may be an undertaking or a temporary grouping of undertakings (RTI), whether already formed or to be formed, demonstrating proven experience in the management of complex energy infrastructure, electricity distribution networks, cold ironing installations or high-power charging stations, operating in compliance with technical and safety standards equivalent to European standards.

The IM is required to ensure fair and non-discriminatory conditions of access and supply, sharing in advance with the competent Port System Authority the conditions of access to the installations, which shall be published on the Authority's institutional website, and is further required to submit semi-annual reports to the Port System Authorities, communicating data relating to the relief measures granted, the energy supplied and the tariff plan applied.

The provision of the service constitutes a service of general economic interest, the managers of which are identified by the competent Authorities through a public tender procedure pursuant to Article 6, paragraph 10, of Law No. 84/1994 and Legislative Decree No. 36/2023 (the so-called Public Contracts Code).

The optimal areas for award (so-called clusters) are identified by the competent Directorate-General, with the possibility for the relevant Port System Authorities to regulate the organization of the award through collaboration agreements pursuant to Article 15 of Law No. 241/1990. The award entails the granting to the IM of a maritime State property concession pursuant to Article 36 of the Navigation Code, while the IM shall be required to submit a balanced economic-financial plan, with tariff revenues sufficient to cover the costs of the service, including a reasonable profit margin tending towards the weighted average cost of invested capital.

5. Conclusions: an evolving regulatory framework

The regulatory framework reconstructed herein presents itself as a regulatory arrangement still in a phase of consolidation, the full definition of which remains contingent upon factors of a technical, economic and institutional nature, operating at both the national and European level. Moreover, notwithstanding the significant progress achieved to date in the subject matter at hand, certain fundamental aspects – such as the definition of the award clusters and the selection criteria for managers, as well as the allocation of responsibilities within the electricity supply chain in the context of the cold ironing system – remain at the implementation stage, and the EU framework on the energy transition of the maritime sector is itself undergoing rapid evolution.

1. ^ This refers to the Direzione generale per i porti, la logistica e l’intermodalità del Ministero delle infrastrutture e dei trasporti, which forms part of the Department for Transport and Navigation (Dipartimento per i trasporti e la navigazione).

On 20 February 2026, Decree-Law No. 21/2026 (“DL Bollette”) was approved and is currently in the process of being converted into law. The Government has called a vote of confidence in the Chamber of Deputies on the text, as approved by the Committee on Productive Activities, with the deadline for conversion into law set for 21 April 2026. The measure amends, inter alia, the provisions of Article 5-bis of Decree-Law No. 63 of 15 May 2024, converted with amendments by Law No. 163 of 12 July 2024 (“DL Agricoltura”), by setting out how biomethane producers and end customers may structure the contractual arrangements for the relevant volumes.

2. The Regulatory Framework: DM Biometano, DL Agricoltura and DM GO 

To better understand the scope of the amendment, it is useful to briefly review the regulatory developments concerning the incentive mechanism governed by the Decree of the Ministry of the Environment and Energy Security of 15 September 2022 (“DM Biometano”), with particular reference to biomethane self-consumption.

As is well known, DM Biometano defined self-consumed biomethane as the volumes of biomethane produced and transmitted, via internal networks at the relevant site, to equipment for self-consumption in the context of production processes carried out by the same producer.

Subsequently, with the entry into force of DL Agricoltura and, in particular, the provisions of Article 5-bis, paragraph 2, the legislator – in order to promote the production of biomethane from agricultural biomass and increase its use in various production sectors that are difficult to decarbonise – introduced significant changes to the definition of self-consumed biomethane within the context of DM Biometano. Consequently, as of today, the term also covers biomethane produced by an agricultural plant at the disposal of the holder of the premium tariff incentives referred to in DM Biometano and transmitted via the third-party connection obligation network to an end customer operating in so-called ‘hard-to-abate’ industrial sectors (“Hard-to-Abate End Customers”).

For the purposes of this extension, pursuant to paragraph 2 of Article 5-bis of DL Agricoltura, the average monthly price of guarantees of origin (“GOs”) shall be zero.

3. Biomethane sale and purchase agreements for self-consumption: change in law referred to in Article 11, paragraph 2, of the DL Bollette

It is precisely on the framework defined by paragraph 2 of Article 5-bis of DL Agricoltura that the DL Bollette intervenes; as clarified in the technical report, it aims to prevent any form of circumvention by producers regarding the valorisation of the GOs.

In this regard, the DL Bollette adds a final sentence to paragraph 2, clarifying that the transfer, even indirect, of the value of the GOs to other cost items in the contract is not permitted, without prejudice to the recognition of fees for the operational management of the contract.

Furthermore, the legislative amendment also introduces the new paragraph 2-bis of Article 5-bis of DL Agricoltura, which, in order to ensure an adequate level of transparency, requires that individual cost items shall be specified in the sale and purchase agreements entered into pursuant to the preceding paragraph. For the same purposes, it is also provided that ARERA, upon the proposal of the GSE, shall make available standard contractual clauses which operators may use.

The subsequent paragraph 2-ter, also introduced by the DL Bollette, limits the scope of application of paragraph 2 of Article 5-bis of the DL Agricoltura. In particular, the provision stipulates that the self-consumption regime applies to sale and purchase agreements signed with Hard-to-Abate End Customers, up to a limit of 35% of such customers’ consumption.

Finally, paragraph 3 of Article 11 of the DL Bollette governs the effective date of the provisions referred to in paragraph 2 of said Article. In the version originally approved by the Council of Ministers, paragraph 3 provided that these provisions would apply to contracts signed from the date of entry into force of the decree. However, the version currently undergoing conversion has postponed this deadline, stipulating that the same provisions shall apply to contracts signed from the thirtieth day following the date of entry into force of the law converting the decree.

The rationale behind these amendments appears consistent with the original purpose of Article 5-bis of DL Agricoltura: to ensure that the GOs are effectively transferred to the end customer, whether or not they are a Hard-to-Abate End Customer, at a zero price, so that they may enjoy the same benefits that would have been granted to the producer in the event of direct self-consumption. The regulatory amendment therefore aims to counter the negotiating practices that emerged during the initial application of Article 5-bis of DL Agricoltura, whereby the economic value of the GOs was effectively shared between the producer and the Hard-to-Abate End Customer.

4. Concluding remarks 

Pending the conversion of the decree and the GSE’s operational rules, the amendments introduced by the decree introduce significant new elements that require careful consideration by industry operators.

Firstly, the introduction of a 35% threshold for the consumption of Hard-to-Abate End Customers as the maximum limit for the application of the self-consumption scheme referred to in the DL Agricoltura entails the need to adjust the volumes that can be contracted under each individual biomethane sale and purchase agreement. However, the provision does not clarify the practical modalities through which this limitation will be applied; it will therefore be necessary to await the publication of the new implementing rules for the DM Biometano in order to fully understand the scope of the change introduced by the DL Bollette.

Secondly, the prohibition on passing on, even indirectly, the value of the GOs to other cost items in the contract has a decisive impact on the pricing structure of biomethane sale and purchase agreements, thus requiring a careful identification of the legitimately recognisable cost components. To this end, the publication by ARERA, upon the proposal of the GSE, of standard contractual clauses, together with the monitoring role assigned to the GSE, will help to define the limits within which biomethane sale and purchase agreements may be considered compatible with the regulatory provisions.

In this context, the overall framework designed by the legislator undoubtedly poses significant challenges in terms of structuring biomethane sale and purchase agreements, with particular reference to the structure of the price agreed between the parties. Nevertheless, the DL Bollette itself appears to leave considerable scope for (i) a definition of the consideration that allows for adequate remuneration of the activities carried out by the producer – or the intermediary – within the context of self-consumption, whilst expressly reserving the right to recognise fees for the operational management of the sale and purchase agreement, and (ii) for the valuation of the biomethane covered by the sale and purchase agreement as a sustainable resource. 

The correct identification of these margins, particularly in view of the standard contractual clauses that ARERA will make available upon the GSE’s proposal, will undoubtedly be of central importance to operators in the sector.

The ruling was issued in proceedings brought by a leading operator in the renewable energy sector, which was developing an agrivoltaic plant covering approximately 13.6 hectares of agricultural land.

In summary, the authority’s refusal was based on:

• the alleged unsuitability of the preliminary sale agreement to demonstrate the availability of the land;
• the applicability of Regional Law of Veneto No. 17/2022 on “non-suitability indicators”, allegedly applicable by way of derogation from the national legislation on suitable areas (Legislative Decree No. 199/2021).

In upholding the application, the Court established the following key principles:

1. (i) as a preliminary matter, the Court dismissed the objection of inadmissibility raised by the defendant local authority, which argued that the preliminary sale and purchase agreements had lapsed due to the failure to execute the final agreements within the agreed 18-month period. The Court, applying the interpretative criteria set out in Articles 1362 and 1363 of the Italian Civil Code, found that the contractual clauses granted the prospective purchaser the right to request an extension – already consented to in advance by the prospective  seller – and that the parties’ intention to maintain the contractual relationship intact was further confirmed by the subsequent execution of a specific addendum setting a new deadline for the conclusion of the final agreements.
   In the context of these arguments, the Regional Administrative Court admitted the filing of the addendum beyond the time limits set out in Article 73 of the Italian Code of Administrative Procedure, in that  (i) it came into existence after the relevant deadline; (ii)  it  became necessary in order to respond to an argument raised for the first time in the statement of defence filed by the Municipality on 26 January 2026, and (iii)  it served to demonstrate the continued interest in pursuing the application.
2. (ii) with regard to the availability of the land for PAS purposes, the preliminary sale and purchase agreement is sufficient to demonstrate the “availability of the areas concerned by the plant and related works” required by Article 6(2) of Legislative Decree No 28/2011, provided that it grants the prospective purchaser adequate rights of enjoyment to carry out the necessary steps for obtaining the authorisation.
   The Regional Administrative Court, in line with the recent case law of the Council of State (Fourth Division, 15 December 2025, No. 9891), clarified that the assessment must be conducted “not in  the abstract, based on the legal form of the transaction used by the parties, but rather in concrete terms, in relation to the scope of the rights granted”. In the present case, it was demonstrated that the preliminary agreements granted the prospective purchaser free access to the sites for inspections, surveys and activities required for obtaining authorisations, while imposing restrictions on the prospective seller, thereby ensuring effective availability of the land to the prospective purchaser.
3. (iii) the areas classified as suitable under Article 20(8)(c-ter)(2) of Legislative Decree No. 199/2021 – in this case, agricultural land lacking particular environmental value located within 500 metres of an industrial facility – retain such classification even where regional legislation (in this case, Veneto Regional Law No. 17/2022) classifies them as “valuable agricultural areas” and therefore presumptively unsuitable. The Regional Administrative Court ruled that regional legislation cannot derogate from the fundamental principles of matters reserved to the State and that the criteria introduced by the regional law “apply exclusively to agricultural areas other than those designated by national law as ‘suitable ex lege’”. Accordingly, the construction of the plant is not conditional upon the applicant meeting the requirements set out in Article 4(3) of Regional Law No. 17/2022;
4. (iv) the mere proximity of a property subject to protection under Legislative Decree No. 42/2004 (in this case, a Venetian villa) does not preclude the area from being classified as suitable under Article 20(8)(c-ter)(2) of Legislative Decree No. 199/2021.
   The Regional Administrative Court, in line with the recent case law of the Council of State (Fourth Division, Nos. 10383/2025 and 1099/2026), clarified that point (c-quater) of the same paragraph 8 is of a residual and general nature, whilst point (c-ter) is of a special nature: the safeguard clause “without prejudice to the provisions of points (a), (b), (c), (c-bis) and (c-ter)” contained in point (c-quater) prevents the latter from introducing an additional suitability requirement beyond those already governed by the preceding specific provisions.
   The Court further noted that the Municipality’s objection regarding the proximity of the Venetian villa constituted an inadmissible ex post supplementation to the grounds of the decision, since that circumstance was not included among the legal grounds on which the refusal was based, but had been mentioned only “for the sake of completeness” in the preliminary investigation section of the contested measure.

This ruling is of considerable significance for operators in the sector, as it confirms – on the merits – fundamental principles regarding (i) the suitability of preliminary agreements as evidence of land availability, (ii) the primacy of the national classification of suitable areas over more restrictive regional provisions, and (iii) the relationship between the various categories of suitability provided for in Article 20(8) of Legislative Decree No 199/2021, with particular regard to the specific nature of point (c-ter) as compared to point (c-quater).

Furthermore, from a procedural standpoint, the judgment confirms the applicant’s right to file documents beyond the time limits set out in Article 73 of the Italian Code of Administrative Procedure, provided that such documents came into existence

after the relevant deadline and are capable of demonstrating the continued admissibility of the application.

The Distinctive Features of a Hybrid PPA

A Power Purchase Agreement — PPA — is, in its most basic form, a long-term contract whereby a renewable energy producer transfers its output to a buyer — typically an industrial consumer or a trader — on predetermined terms, thereby avoiding the volatility of the spot market.

The traditional pay-as-produced PPA has features that have certainly facilitated its uptake, particularly in Italy: volume risk is clearly allocated, the bankability of multi-year contracts with creditworthy counterparties is high, and the production profile of a photovoltaic or wind plant does not necessarily match the buyer's consumption profile. It is precisely this last feature that, in future market developments, could constitute a limitation to the further expansion of long-term contracts.

The Hybrid PPA was created precisely to overcome this potential limitation, combining one or more generation sources and BESS in an integrated structure. The addition of storage makes it possible to transform an intermittent and otherwise unmanageable production profile into one that more closely matches the consumer's needs. In essence, the BESS, together with trading activities, makes the product — the energy delivered to the end customer — qualitatively different from the basic as-produced output of a single renewable plant.

The Subjective Structure of the Hybrid PPA: Actors and Rationales

From a structural standpoint, a physical Hybrid PPA may involve the interests of a plurality of parties: the holders of renewable energy generation plants, the holders of storage systems, the trader acting as aggregator, the energy-intensive end customer, and the technology supplier/EPC Contractor. It is worth pausing on each of them, as the complexity of the Hybrid PPA stems precisely from the need to balance interests that do not always converge spontaneously.

The energy-intensive end customer has a clear priority: to receive energy in baseload form, with delivery at the PCE and Guarantees of Origin in relation to the volumes covered by the Hybrid PPA.

The trader has a twofold main interest: to present the energy-intensive end customer with a product that is as attractive as possible, while at the same time maximising its own margin by keeping the prices paid to the generator under the PPA and to the storage holder under the tolling agreement as low as possible. The trader's commercial objective is to enter into a PPA that is as close as possible to a Pay as Nominated arrangement with the generator — i.e. a Pay as Produced with a guaranteed minimum monthly volume — with delivery at the PCE.

The storage holder is primarily interested in receiving from the trader a fixed fee or a floor under the tolling agreement, such as to make this solution preferable to — and compatible with — any alternative means of valorising the storage capacity, including participation in the Capacity Market.

The Plant SPV aims to stabilise its revenues by entering into a PPA at the highest possible price, while ensuring the bankability of the contract.

Protection Requirements: Guarantees and Bankability

One of the most sensitive — and practically relevant — aspects of this contractual architecture concerns risk management and the structuring of guarantees among the parties, including the technology supplier and EPC Contractors, also for bankability purposes.

The trader will seek to protect itself against the various risk fronts by requesting the delivery of guarantee instruments.

The Regulatory Framework

In this context, the enabling role of public instruments also comes into play: the Energy Release, the FER mechanisms, including FER Z, the MACSE, the Capacity Market, the MPPA and public guarantees, as well as the need to regulate the coexistence and interaction between public incentivisation and private contracting.

Will the PPA market finally take off, or will it remain marginal compared to the public schemes managed by the GSE? Will FER-Z — with its decentralised structure and incentivisation of profile delivery — contribute to the growth of the PPA market, or could it prove to be a limitation?

Given the extent of the innovations introduced, through this column, Energy Law Italy continues its analysis of the key measures set forth by the Decree, dedicating an analysis to each legislative amendment with particular focus on their potential practical implications (the other contributions are available at the following link).

In this analysis, we focus on the Decree's tax-related measures and in particular those concerning the IRAP rate applicable to energy sector operators. 

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Temporary increase of the IRAP rate

Specifically, Article 3 of the Decree – entitled “Provisions concerning the IRAP rate for energy sector enterprises” – provides for a two-percentage-point increase in the IRAP rate set forth in Article 16, paragraphs 1 and 1-bis, of Legislative Decree No. 446/97 establishing the regional tax on productive activities (IRAP), for the 2026 and 2027 tax years.

The surcharge applies to entities that predominantly carry out certain activities attributable to the energy sector, as identified by specific ATECO codes listed in Table 1 annexed to the Decree (further detailed below).

From an operational standpoint, the measure effectively entails:

• an increase in the ordinary rate from 3.9% to 5.9% for the generality of affected taxpayers.

• an increase from 4.2% to 6.2% in the rate applied to concessionaire enterprises, other than those engaged in the construction and management of highways and tunnels.

Effective Date

The surcharge, which is expressly temporary and non-structural in nature, applies starting from the tax year following the one in progress as of 31 December 2025.

For entities whose fiscal year coincides with the calendar year, the increase will therefore take effect as of 1 January 2026.

Subjective Scope and the Predominance Criterion

The subjective scope of the surcharge is determined on the basis of a “predominance” criterion, defined by reference to the “predominant” conduct of economic activities that must be attributable to the following macro-sectors identified in Table 1 annexed to the Decree:

• Extractive Activities (Section B):

  • 06 – extraction of crude petroleum and natural gas.

  • 09.1 – support activities for petroleum and natural gas extraction.

• Manufacturing Activities (Section C):

  • 19.2 – manufacture of products derived from petroleum refining and products from fossil fuels.

• Electricity and Gas Supply (Section D):

  • 35.1 – Production, transmission, and distribution of electric power.

  • 35.2 – Production of gas and distribution of gaseous fuels through mains.

  • 35.4 – Intermediation service activities for electricity and natural gas.

• Transportation and Storage (Section H):

  • 49.50.1 – Transport of gas via pipelines.

In the absence of further implementing guidance or criteria expressly defined by the legislature (potentially already during the parliamentary conversion process), the notion of “predominance” will likely need to be construed by reference to objective parameters, such as revenue volume or the value of production relevant for IRAP purposes. Consistent with the framework of the regional tax, it appears reasonable to consider that the decisive criterion may be identified in the percentage weight of the net production value attributable to energy activities relative to the total.

A particularly noteworthy issue concerns enterprises that, in addition to the activities falling within the ATECO codes identified by the Decree, also carry out further activities outside the energy perimeter. Based on the literal wording of the provision, it would appear that, where the energy activity is predominant, the increased rate applies to the entire IRAP tax base and not solely to the portion of net production value attributable to the predominant segment.

Such an interpretation, if confirmed in administrative practice, could give rise to significant complexities in application, particularly for multi-business groups, vertically integrated utilities, and companies engaged in mixed activities, where the delineation of the energy perimeter – for purposes of verifying predominance – may not always be straightforward, especially in the presence of functionally integrated activities or organizational models that do not allow for a clear separation of economic flows. This would indeed entail potential issues both in the subjective qualification phase and in the planning of overall tax impacts.

Impact on Advance Payments: Recalculation Using the Historical Method

A particularly significant operational aspect of the new legislative provision concerns its coordination with the mechanism for determining advance payments under the historical method. Paragraph 2 of Article 3 provides that, for purposes of calculating the advance payment due for the tax year following the one in progress as of 31 December 2025, the tax liability for the preceding period must be recalculated as if the increased rate were already applicable.

In substantive terms, this results in an acceleration of the tax burden already at the advance payment stage for 2026, with immediate effects on the liquidity and financial planning of the affected enterprises. The additional tax burden will therefore materialize before the final settlement, effectively enabling the Ministry of Economy to collect the resources as early as the upcoming June and November 2026 deadlines, and significantly impacting entities characterized by high production values and capital-intensive structures.

Allocation of Revenue and Redistributive Mechanism

The provision under review outlines and forms part of a broader strategy for the redistribution of resources within the energy sector, leveraging the IRAP tax mechanism to finance a targeted reduction in general system charges.

The Decree provides that the resources generated by the rate increase shall be entirely allocated to reducing the A_SOS component of the electricity bill for non-domestic users, excluding: (i) public lighting users, low-voltage users for other purposes, and non-domestic users connected at medium, high, and extra-high voltage; (ii) withdrawals benefiting from the special tariff regime under Article 29 of Decree-Law No. 91/2014; and (iii) users enrolled in the registry of enterprises with high electricity consumption established at the Fund for Energy and Environmental Services (CSEA) pursuant to Article 3 of Decree-Law No. 131/2023.

The benefit is therefore not absolute in scope but is directed at the intermediate productive sector that does not benefit from the preferential regimes reserved for large energy-intensive consumers and major industrial districts and that, in proportional terms, bears a significant incidence of general system charges.

In these terms, an internal reallocation mechanism within the energy system is thus established, whereby a portion of the additional tax revenue from energy supply chain operators is allocated to reducing energy costs for non-energy-intensive productive enterprises, with the stated objective of structurally mitigating the burden of general system charges.

From a systemic perspective, the measure is situated within a logic of internal rebalancing of the energy supply chain, aiming to capture a portion of the margins potentially earned in certain segments of the sector and to allocate them toward containing the energy costs borne by enterprises that are less protected against market volatility.

Although the provision does not expressly characterize the surcharge as a “solidarity contribution,” the structure of the intervention – confined to a specific sector and aimed at redistributing resources within it – recalls and presents clear substantive analogies with prior sector-specific levy measures oriented toward redistributive purposes.

It remains to be seen, however, including in light of future interpretive and implementing guidance, whether the legislative framework will succeed in reconciling the objective of equity with the need to ensure certainty and stability of the tax landscape. In particular, it will be necessary to assess whether the temporary increase in the IRAP rate may affect investment decisions and the predictability of the tax burden for sector operators, especially in an industry characterized by high capital intensity and medium- to long-term planning horizons.

Preliminary Considerations

The new regulatory framework effectively requires potentially affected enterprises to undertake a careful and timely internal analysis. In particular, it appears essential to conduct a thorough review of one's ATECO classification, also in light of the activities actually carried out and their economic significance, as well as a technical analysis of the criteria for determining “predominance,” with specific reference to the proportion of net production value attributable to energy activities.

At the same time, the economic and financial impacts arising from the rate increase must be assessed in advance, also considering the recalculation of the 2026 advance payments under the historical method, which will result in an acceleration of the higher tax burden.

In this context, a proactive and structured approach could help mitigate tax and interpretive risks, safeguard compliance requirements, and coherently and promptly integrate – although on a temporary basis - the new and increased charges into the tax and financial planning process, within an evolving regulatory environment that is moreover subject to potential amendments during the parliamentary conversion of the decree-law into statute.

Given the scope of the changes introduced, with this editorial series, Energy Law Italy launches a dedicated space for the analysis of the key measures brought in by the Decree, with a focused commentary on each legislative amendment and particular attention to their potential practical implications.

In this article, we focus on the impact of the Decree with regard to the measures aimed at reducing costs for electricity generation from gas-fired thermoelectric sources.

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Article 6 of Decree-Law No. 21/2026 (the so-called "DL Bollette") introduced a reimbursement mechanism for gas-fired thermoelectric producers that, in terms of both structure and scope, is without precedent in the European regulatory landscape. The measure, which provides, inter alia, for the compensation of direct costs incurred for the purchase of emission allowances under the EU ETS system, raises questions of primary importance regarding its compatibility with the legal order of the European Union. This contribution aims to examine the principal areas of concern arising from the provision, from its classification as State aid to its implications for the functioning of the single energy market, offering a systematic interpretive framework for a legislative intervention that is destined to fuel a debate transcending national borders.

1. Background and Purpose of the Legislative Intervention

On February 18, 2026, the Italian Government adopted Decree-Law No. 21/2026 (published in the Official Gazette No. 42 of February 20, 2026), entitled "Urgent measures for the reduction of electricity and gas costs for households and businesses, for the competitiveness of enterprises and for the decarbonization of industries, as well as urgent provisions regarding the resolution of virtual saturation of electricity grids and the integration of data processing centers into the electricity system."

Beyond the stated and commendable objective of containing energy costs for households and businesses, among the provisions that have attracted the greatest interest – and the most heated debate – within the sector are those contained in Article 6 of the decree, entitled "Urgent measures for the reduction of charges on natural gas withdrawn for the purpose of electricity generation and for the strengthening of competitiveness in wholesale electricity markets." Said Article introduces a dual reimbursement mechanism for gas-fired thermoelectric producers: (i) the reimbursement of specific components of the natural gas transportation tariff applied to withdrawals for the production of electricity injected into the grid; (ii) an additional reimbursement commensurate with the expected cost of emission allowances under the EU ETS system for an efficient combined cycle gas turbine (CCGT) plant. The latter measure is expressly conditioned upon the prior authorization of the European Commission pursuant to Article 108(3) TFEU.

2. The EU ETS System: Architecture and Fundamental Principles

The European Union Emissions Trading System (EU ETS), established by Directive 2003/87/EC, constitutes the principal instrument adopted by the European Union for the achievement of CO₂ emission reduction targets in the major industrial sectors and in the aviation sector. Operational since 2005 as the first and largest carbon market worldwide, the system was conceived to implement the commitments undertaken by the EU under the Kyoto Protocol and was subsequently aligned with the objectives of the Paris Agreement.

The system is founded upon the "polluter pays" principle enshrined in Article 191(2) TFEU, which requires the internalization of environmental costs by those responsible for emissions. The market-based approach was selected in order to achieve emission reductions in the most cost-efficient manner, allowing the market to determine the carbon price and to incentivize emission abatement wherever it proves least economically burdensome.

It is a cap-and-trade mechanism that sets an overall ceiling (cap) on the emissions permitted across European territory in the covered sectors, to which corresponds an equivalent number of emission allowances (where 1 ton of CO₂eq. equals 1 allowance), which may be purchased or sold on a dedicated market (trade). Each industrial operator active in the sectors covered by the scheme is required to offset, on an annual basis, its actual emissions – as verified by an independent third party – with a corresponding quantity of allowances. The accounting of offsets is maintained through the Union Registry, while oversight of compliance with the deadlines and rules of the mechanism is entrusted to the National Competent Authorities (NCAs).

The system has evolved through four successive phases (Phase I: 2005–2007; Phase II: 2008–2012; Phase III: 2013–2020; Phase IV: 2021–2030), with progressively more stringent caps. The overall quantity of allowances available to operators (cap) decreases over time, effectively mandating a reduction in greenhouse gas emissions in the ETS sectors: in particular, by 2030, the mechanism will ensure a 43% reduction compared to 2005 levels. The system is an integral component of the achievement of the EU's binding climate targets, including the 55% emission reduction by 2030 pursuant to the European Climate Law (Regulation 2021/1119) and climate neutrality by 2050. The Market Stability Reserve absorbs surplus allowances (24% annually) or releases them in the event of scarcity, ensuring price stability and the proper functioning of the market.

Allowances may be allocated on an onerous or gratuitous basis. In the former case, they are sold through public auctions in which accredited entities participate, purchasing primarily to offset their own emissions, but which may also supply the secondary carbon market. In the latter case, allowances are allocated free of charge to operators at risk of relocating production to countries characterized by less stringent environmental standards than those of the EU (so-called carbon leakage). Free allocations are the province of the manufacturing sectors and are calculated by reference to the emissions of the most "virtuous" installations (so-called benchmarks, predominantly based on the most efficient production processes).

For the purposes of this analysis, it is appropriate to distinguish between direct carbon leakage and indirect carbon leakage. The former refers to the risk of relocation of European enterprises to third countries with less stringent environmental standards, driven by the high direct cost of emission allowances. The latter concerns the increase in electricity prices caused by the pass-through of ETS costs by thermoelectric producers into the prices of electricity sold to end consumers, with a consequent increase in costs for European electro-intensive enterprises exposed to international competition.

The system is structured so as to incentivize greenhouse gas emission reductions and energy-efficient techniques, considering available technologies, substitute products and alternative production processes, high-efficiency cogeneration, efficient energy recovery from waste gases, the possibility of using biomass, and carbon capture and storage.

A crucial aspect for understanding the criticalities of the Italian measure concerns the regime applicable to electricity producers. Within the framework of the EU ETS, electricity producers do not benefit from the free allocation of allowances, with the exception of the specific cases provided for in Article 10c of the ETS Directive and for electricity produced from waste gases. The exclusion of the electricity sector from free allocation is based on the premise that electricity producers can pass through the cost of ETS allowances in the prices of electricity sold to end consumers (the pass-through or carbon cost transfer phenomenon), unlike other industrial sectors exposed to international competition that face the risk of emission relocation (carbon leakage).

As of 2019, Member States shall auction all allowances that are not allocated free of charge pursuant to Articles 10a and 10c of the ETS Directive and that are not placed in the Market Stability Reserve.

Accordingly, thermoelectric producers (gas-fired CCGTs, coal-fired plants, etc.) are required to:

• obtain an authorization to emit greenhouse gases and surrender emission allowances equal to the total emissions released by the installation during each calendar year, as verified pursuant to Article 15 of the Directive, by September 30 of the following year.

• bear the actual economic cost for each ton of CO₂ emitted, equal to the price of allowances purchased at auction.

• purchase ETS allowances through auctions organized by the Member States, rather than receiving them free of charge.

   

3. Anatomy of Article 6: Structure and Mechanism

Article 6 of Decree-Law No. 21/2026 is structured in six paragraphs (commi), each of which warrants detailed examination.

• Paragraph 1 – Strengthening of competition in the wholesale electricity market. For the purpose of strengthening competition in wholesale electricity markets and promoting the pass-through in offer prices of the valuation of variable costs of non-programmable renewable energy sources, ARERA is required to adopt, within three months of the entry into force of the decree, in implementation of Regulation (EU) No. 1227/2011 (REMIT), one or more measures for the assessment of economic capacity withholding conduct by wholesale market operators. In particular, the provision stipulates that, with reference to sell offers submitted in the Day-Ahead Market (MGP), opportunity costs estimable at the time of negotiation shall constitute the sole legitimate economic grounds for offering at a price above the marginal cost of generation capacity, in line with the guidelines of the European Union Agency for the Cooperation of Energy Regulators (ACER) of December 18, 2024.

• Paragraph 2 – Reimbursement of natural gas transportation tariff components. ARERA, through one or more measures, shall define the modalities by which, effective January 1, 2027, the variable unit charges of the natural gas transportation tariff – other than those serving to cover costs of a variable nature – and the additional tariff components of the natural gas transportation tariff covering general system charges of the gas system, applied to natural gas withdrawals for the production of electricity injected into the grid, in addition to those already subject to reimbursement pursuant to ARERA Resolution of March 26, 2020, No. 96/2020/R/eel, shall be included among the charges subject to reimbursement to thermoelectric producers. The shortfall in revenue resulting from the reimbursement shall be covered through components applied to electricity withdrawals, in accordance with the modalities defined by ARERA, which shall, where necessary, update the provisions set forth in Resolution 96/2020/R/eel.

• Paragraph 3 – Additional reimbursement for ETS costs. In addition to the provisions of Paragraph 2, ARERA, by means of a dedicated resolution, shall regulate the reimbursement to thermoelectric producers, for natural gas withdrawals for the production of electricity injected into the grid, of an amount determined by the Authority with adequate advance notice and for predefined time periods, in order to maximize the benefits for Italian consumers, also taking into account the expected impacts on cross-border exchanges, and in any event within the limit of the expected cost, for the same period, for an efficient combined cycle gas turbine (CCGT) plant for compliance obligations connected to ETS emissions. The shortfall in revenue resulting from such reimbursement shall be covered pursuant to Paragraph 2, last sentence.

• Paragraph 4 – Verification of full pass-through of reimbursements in sell offers. ARERA shall verify that the reimbursements referred to in Paragraphs 2 and 3 are fully passed through in the sell offers pertaining to the thermoelectric plants benefiting from said reimbursements. In the event of a negative verification, the producer shall be required to return the relevant reimbursements, increased by any penalties imposed by the Authority pursuant to Law No. 481 of November 14, 1995. To this end, ARERA, through the same measures referred to in Paragraph 1, shall define the modalities and criteria for verification procedures, as well as the offer behaviors to be deemed in any event compliant with the pass-through obligation.

• Paragraph 5 – Adjustment of the capacity market. ARERA shall adjust the economic conditions provided for in the capacity market framework pursuant to Legislative Decree No. 379 of December 19, 2003, to take into account the effects arising from the implementation of Paragraphs 1, 2, and 3.

• Paragraph 6 – Subordination clause requiring prior European authorization. The effectiveness of the provision set forth in Paragraph 3 is conditioned upon the prior authorization of the European Commission pursuant to Article 108(3) of the Treaty on the Functioning of the European Union.

   

4. Systemic Implications of the ETS Reimbursement

The reimbursement provided for under Article 6, Paragraph 3, of the decree to thermoelectric producers for ETS costs incurred in electricity generation presents particularly significant areas of concern from a systemic standpoint.

First, the measure neutralizes the decarbonization incentive inherent in the ETS system, which requires thermoelectric producers to internalize emission costs, thereby incentivizing the transition toward lower carbon-intensity generation sources.

Second, the mechanism transfers the cost of emissions from the producers – who bear direct responsibility therefor – to end consumers, through tariff components applied to electricity withdrawals, thereby inverting the logic of the "polluter pays" principle.

Third, the measure contradicts the principle of excluding the electricity sector from the free allocation of allowances, reintroducing de facto a form of economic compensation that eliminates the exposure of thermoelectric producers to the carbon price.

5. Classification as State Aid Pursuant to Article 107(1) TFEU

For a measure to constitute State aid within the meaning of Article 107(1) TFEU, four cumulative conditions must be satisfied: (i) the measure must be granted by the State or through State resources; (ii) it must confer a selective advantage on certain undertakings or the production of certain goods; (iii) it must affect trade between Member States; (iv) it must distort or threaten to distort competition.

The reimbursement to thermoelectric producers provided for under Article 6 of the decree satisfies all of the foregoing criteria:

• State resources. The shortfall in revenue resulting from the reimbursement is covered through components applied to the electricity withdrawals of end customers, in accordance with modalities established by ARERA, thereby constituting a transfer of resources from consumers to producers mediated by a public mechanism (regulated tariff components).

• Selective advantage. The measure confers an economic advantage on thermoelectric producers by compensating costs (ETS and gas transportation) that said producers would have borne under normal market conditions. The advantage is selective insofar as it is granted exclusively to undertakings active in a specific sector of electricity generation.

• Effect on trade. The electricity sector is fully integrated at the European level through the Single Day-Ahead Coupling (SDAC), market coupling, and cross-border interconnections. Any advantage conferred on domestic producers therefore affects trade between Member States.

• Distortion of competition. The measure alters the relative competitiveness of Italian thermoelectric producers vis-à-vis those of other Member States and vis-à-vis other generation technologies (renewables, nuclear, hydroelectric).

   

6. The Notification Obligation and the Risk of Unlawful Aid

Regulation (EU) 2015/1589 provides that plans to grant new aid shall be notified to the Commission and shall not be put into effect before the Commission has taken a decision authorizing such aid (standstill obligation pursuant to Article 108(3) TFEU). Implementation of the measure in violation of the notification obligation would constitute unlawful aid, subject to a recovery order – inclusive of interest – should the Commission adopt a negative decision.

From a temporal standpoint, it is observed that the effective date of the mechanism is set at January 1, 2027, rendering uncertain the completion of the European authorization process in time for the commencement of the measure.

An aspect warranting particular attention concerns the scope of the subordination clause. Paragraph 6 of Article 6 conditions upon the prior authorization of the European Commission only the effectiveness of Paragraph 3 (reimbursement of ETS costs). However, Paragraph 2 – which provides for the reimbursement of natural gas transportation tariff components to thermoelectric producers – likewise presents the same constituent elements of State aid analyzed above (State resources, selective advantage, effect on trade, distortion of competition). The implementation of Paragraph 2 without prior notification to the European Commission therefore entails a concrete risk of illegality of the measure.

7. Principal Areas of Incompatibility with European Union Law

a. Structural Divergence from the ETS Guidelines

The European Commission's Guidelines (2022 Guidelines on State aid for climate, environmental protection and energy) authorize aid to compensate for indirect emission costs, defined as the costs of emissions passed through in electricity prices and borne by undertakings active in sectors or subsectors deemed to be exposed to a significant risk of carbon leakage due to indirect costs, as listed in the relevant Annex. The stated objective is to prevent the significant risk of carbon leakage for sectors exposed to international competition that cannot pass through such costs in product prices without losing significant market share.

The Italian measure, by contrast, provides for a direct reimbursement to thermoelectric producers for ETS costs incurred in electricity generation.

Such scheme: (i) does not fall within the category of indirect emission costs contemplated by the ETS Guidelines; (ii) compensates energy producers – who are direct participants in the ETS – rather than industrial consumers; (iii) risks undermining the carbon price signal that underpins the functioning of the ETS as a cost-effective emission reduction mechanism. The divergence is structural and without precedent among the schemes authorized by the European Commission.

The Italian measure furthermore appears to constitute a violation of marginal pricing and the Single Day-Ahead Coupling (SDAC).

The statutory imposition on gas-fired thermoelectric producers to offer in the MGP at prices stripped of actual cost components (ETS and gas transportation) conflicts with the uniform marginal pricing principle of the European day-ahead market, as established by the CACM Regulation (Capacity Allocation and Congestion Management), which may not be unilaterally derogated by a Member State. The impact of such mechanism on wholesale price formation is all the more significant given that, as noted by ARERA, in the Italian electricity market CCGT/gas plants were at the margin (price setting) in 68% of hours in 2023 and 71% of hours in 2024, confirming their determinative role in zonal price formation in the MGP.

Finally, an intervention that compels operators by law to offer prices different from those justified by actual costs creates an "artificial" price in the day-ahead market, distorting the European market coupling mechanism.

In this regard, it is significant to observe that the analogy with the "Tope Ibérico" of 2022 – the Spanish-Portuguese mechanism capping the price of gas used for electricity generation – is only partial: the Tope Ibérico was authorized by the European Commission as a temporary and exceptional derogation from the SDAC in the context of an extraordinary energy crisis (the Russian invasion of Ukraine, the surge in gas prices), whereas Article 6 of the decree appears to constitute a structural intervention without an explicit temporal limitation.

b. Incompatibility of Paragraph 1 with the Legal Order of the European Union

The provision contained in Paragraph 1 of Article 6 is entirely unprecedented and peculiar in character. For the first time, the national legislature imposes upon the national regulatory authority (ARERA) the obligation to conform to a specific interpretive reading of a European Union regulation – REMIT – prescribing that, in the exercise of its supervisory function over the conduct of operators in the wholesale market, offers formulated at prices above marginal cost shall be presumed illegitimate, unless the operator provides adequate economic justifications based on opportunity costs estimable at the time of negotiation.

This provision is consistent with the position recently expressed by ARERA in Resolution No. 302/2025/R/eel, adopted following a fact-finding inquiry into the outcomes of national short-term delivery auction electricity markets. The position taken by the Authority has provoked strong reactions from sector operators, who contend that the marginal cost criterion does not permit the recovery of fixed costs, including investment costs. This has given rise to litigation, currently pending before the Milan Administrative Court (TAR Milano), in which the applicants challenge the interpretation of Article 5 of REMIT advanced by ARERA, deeming it inconsistent with the guidance provided by ACER in its own Guidelines.

The legislative imposition upon the national regulatory authority of the obligation to interpret REMIT in conformity with governmental directives is difficult to reconcile with the normative architecture of the European Union. Within the system of EU law, a regulation is binding in its entirety and directly applicable in each of the Member States, and the competence to provide its authentic and binding interpretation rests exclusively with the Court of Justice of the European Union, in safeguard of the principles of the primacy of EU law, the autonomy of the European legal order, and the uniform application of common rules. The national legislature, while empowered to regulate aspects left to the discretion of Member States, may not therefore impose a binding interpretation of a Union regulation.

Article 6, Paragraph 1, of the decree, moreover, in prescribing a particular interpretation of REMIT, encroaches upon the sphere of independence that EU law reserves to national regulatory authorities. Pursuant to Article 57 of Directive (EU) 2019/944 concerning common rules for the internal market for electricity, such authorities shall neither seek nor take instructions from any government or from any other public or private entity when carrying out their regulatory tasks. The Court of Justice has further clarified that EU law guarantees such authorities "full independence from economic operators and public bodies, whether administrative or political, and in the latter case whether holders of executive or legislative power" (judgment of September 2, 2021, Commission v. Germany, C-718/18).

c. The Risk of Market Manipulation Under REMIT

The REMIT Regulation (1227/2011) prohibits any transaction, order to trade, or offer which secures or attempts to secure the price of one or more wholesale energy products at an artificial level, unless the person demonstrates that its reasons for doing so are legitimate and that the transaction conforms to accepted market practices.

A normative paradox arises: in the event that ARERA has identified possible discrepancies between market prices and marginal costs attributable to bidding strategies of thermoelectric producers, the statutory obligation to offer at prices stripped of actual cost components (ETS and gas transportation) could paradoxically itself constitute an "institutionalized" price manipulation, creating an artificial price level by operation of law.

The decree entrusts ARERA with the task of verifying – also on the basis of Articles 2 and 5 of Regulation (EU) 1227/2011 (REMIT) – that the reimbursements are fully passed through in the sell offers pertaining to the relevant installations, and of adopting measures to assess "economic withholding" conduct in wholesale markets. However, the verification of "full pass-through" of reimbursements in offers presents significant operational and enforcement difficulties: (i) difficulty in granular monitoring of hourly bidding strategies; (ii) risk of overcompensation if the pass-through does not occur in full; (iii) potential distortions if operators adopt arbitrage strategies between reimbursements and market prices.

d. Cross-Border Distortions and the Risk of "Energy Dumping"

ARERA is required to regulate the "additional" reimbursement taking into account the expected impacts on cross-border exchanges (market coupling). The Italian day-ahead market is part of the European Single Day-Ahead Coupling (SDAC), with rules – including uniform marginal pricing – of EU origin that may not be unilaterally derogated.

The artificial reduction of the Italian price through the stripping out of ETS and gas transportation costs would entail the following distortions:

• Increase in Italian exports: artificially lower Italian prices would render Italy a net exporter to neighboring countries (France, Austria, Slovenia, Switzerland, Greece), increasing domestic gas-fired thermoelectric production, with consequent higher emissions and ETS costs.

• Cross-subsidy paradox: Italian consumers would pay, through the components applied to electricity withdrawals, the reimbursement costs including for exported production, thereby effectively subsidizing foreign consumers – who are potentially competitors of Italian industry.

• Incompatibility with the SDAC: ARERA has indicated that in its own simulations it was not possible to fully account for cross-border exchanges due to the complexities of modeling European market coupling. A mechanism that unilaterally modifies price formation could require Italy's exit from the SDAC or the creation of "two prices" (domestic and export), both solutions of difficult compatibility with EU law. The European Parliament, in its resolution of January 18, 2024, on the reform of the EU electricity market, emphasized the importance of preserving the integrity of the single energy market and of avoiding distortions arising from unilateral national price interventions.

8. Implications for the Retail Market and Distributional Concerns

The reimbursement is financed through components applied to the electricity withdrawals of end customers, in accordance with modalities defined by ARERA. However, the decree provides no details as to how such components would be apportioned among different categories of customers (fixed-price vs. indexed contracts, "renewable" vs. conventional supplies).

With respect to the critical issues, it is observed first that customers with fixed-price contracts have already incorporated in their contractual prices the expected ETS cost for the contractual period: requiring them to contribute again to the same costs through system charges could constitute double taxation and generate litigation. Similarly, customers with certified renewable supplies could legitimately contend that they should not be required to contribute to ETS costs, inasmuch as their demand is not served – at least from a contractual standpoint – by emitting installations. Requiring such parties to pay system charges intended to reimburse the ETS costs of thermoelectric producers could therefore constitute a violation of the "polluter pays" principle enshrined in the ETS Directive.

Should the Commission declare the mechanism unlawful on grounds of incompatibility with State aid rules, customers who have already paid the tariff components could seek reimbursement, with consequent litigation and legal uncertainty.

9. Absence of Environmental Conditionalities

The indirect ETS compensation schemes authorized by the Commission for the 2021–2030 period provide for stringent conditionalities: (i) mandatory implementation of certified energy management systems (ISO 50001) or environmental management systems (EMAS); (ii) implementation of energy efficiency measures with a payback period not exceeding three years; (iii) investments equal to at least 50% of the aid received in decarbonization or energy efficiency, or coverage of at least 30% of electricity consumption from renewable energy sources.

The DL Bollette does not provide for analogous conditionalities for the thermoelectric producers benefiting from the reimbursement. Such lacuna could be regarded by the Commission as: (i) a lack of proportionality of the aid relative to the objectives pursued; (ii) an absence of incentives for the energy transition and emission reduction; (iii) incompatibility with the objectives of the European Green Deal and with the "do no significant harm" (DNSH) principle. The 2022 Guidelines recall the general principle that State aid must be necessary, proportionate, and such as not to cause undue distortions of competition, and must contribute to the objectives of the European Green Deal.

10. Comparison with Schemes Adopted in Other European Countries

To fully appreciate the innovative – and problematic – scope of the Italian measure, it is useful to compare it with the ETS cost compensation schemes authorized by the European Commission in other Member States, which present a radically different structure.

Germany: Scheme SA.36103 (2013) for the period 2013–2020, with an estimated total budget of approximately EUR 1.6 billion; Scheme SA.100559 (2022) for the period 2021–2030, with an estimated budget of EUR 27.5 billion.

Poland: Scheme SA.53850 (2019) for the years 2019–2020, with a budget of approximately EUR 417.5 million.

United Kingdom (pre-Brexit): Scheme SA.35543 (2013) for the period 2013–2020, with a budget of GBP 113 million (approximately EUR 143 million in 2013).

Other countries: The Netherlands, Finland, Spain, Belgium, France, and other Member States have notified analogous indirect ETS compensation schemes.

Fundamental common characteristic: all authorized schemes compensate the indirect ETS costs borne by electro-intensive industrial consumers – i.e., the costs of emissions passed through in electricity prices – and not the direct ETS costs borne by energy producers. None of the schemes authorized by the European Commission provides for the compensation of thermoelectric producers for direct ETS costs.

11. Concluding Observations and Outlook

In light of the analysis conducted herein, the likelihood that the European Commission will authorize the measure set forth in Article 6, Paragraph 3, of the decree appears objectively very low, although the final outcome will also depend on the definitive formulation of the measure and the implementing modalities to be defined by ARERA, as well as on the political dialogue regarding the reform of the ETS mechanism.

The criticalities emerging from the analysis may be summarized as follows. First, there is a radical structural divergence from the schemes authorized by the European Commission: the measure compensates thermoelectric producers for direct ETS costs, rather than industrial consumers for indirect ETS costs, without any precedent in the Commission's decisional practice. Second, the statutory imposition to offer at prices stripped of actual costs conflicts with the uniform marginal pricing principle of the CACM Regulation, which may not be unilaterally derogated by a Member State, thereby constituting a violation of the SDAC and of marginal pricing. Third, Paragraph 1 of Article 6 presents areas of incompatibility with the legal order of the European Union, insofar as the national legislature imposes upon ARERA a binding interpretation of REMIT – a directly applicable regulation whose authentic interpretation is reserved to the CJEU – in violation of the primacy of EU law and of the independence of national regulatory authorities pursuant to Article 57 of Directive (EU) 2019/944 and the case law of the Court of Justice (judgment of September 2, 2021, C-718/18, Commission v. Germany). To this must be added the risk of potential market manipulation under REMIT, given that the statutory obligation to offer at artificially low prices could itself constitute "securing the price at an artificial level" prohibited by Article 5 of REMIT. On the plane of cross-border effects, the artificial reduction of the Italian price would entail an increase in exports, with Italian consumers financing through system charges the emissions attributable to exported production, giving rise to distortions and cross-subsidies. There is further the absence of any environmental conditionality whatsoever, the decree providing for no obligation in terms of energy efficiency, decarbonization, or investment in renewable sources, in contrast with the requirements of the 2022 Guidelines and the DNSH principle. Finally, Paragraph 2 of the same Article, concerning the reimbursement of natural gas transportation tariff components to thermoelectric producers, in all likelihood satisfies the requirements of State aid, yet is not conditioned upon the prior authorization of the European Commission, with a consequent risk of illegality, compounded by the temporal uncertainty connected to the effective date of the mechanism of January 1, 2027.

In conclusion, in light of the comprehensive legal analysis conducted herein, the measure introduced by the Italian Government would appear destined not to withstand scrutiny by the European institutions, presenting areas of incompatibility so radical and structural as to render its approval an entirely improbable outcome. It would, however, be reductive to confine the assessment to one of mere legality. On the political-institutional plane, Article 6 of the DL Bollette represents an unequivocal signal of the growing pressure exerted by Member States for a profound revision of the current architecture of the EU ETS system – a pressure that could find its first, decisive manifestation as early as the European Council of March. The debate that will ensue, at both the national and European levels, is destined to redefine, perhaps in ways unforeseen today, the boundaries of the relationship between national energy policy and the constraints of the single energy market.

LONDON (ICIS)–Legal experts told ICIS that article 6 of the Italian “DL Bollette” energy decree – which introduces an ETS-linked compensation mechanism for gas-fired power producers – is unlikely to be approved by the European Commission because of its selective and structural, rather than exceptional, nature.

ICIS spoke to Piero Vigano, partner and coordinator of the energy and infrastructure department, and Francesco Mazzocchi, counsel in competition and European Union law at law firm ADVANT Nctm, who said that, as the decree stands, “the likelihood that the European Commission will authorize the measure does not appear to be high.”

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Such right – which originated as early as Law No. 109/1994, but has no equivalent in EU law – entitles the promoter, if not awarded the contract in the tender procedure launched by the contracting authority, to adjust its offer to match that of the successful tenderer or, where the pre-emption right is not exercised, to obtain reimbursement of the costs incurred in preparing the bid.

The Court of Justice, following a referral from the Italian Council of State, held that the pre-emption mechanism is contrary to the principle of equal treatment in procedures for the award of concession contracts. In particular, the Court highlighted that such a mechanism may overturn the outcome of the tender and that, where the pre-emption right is exercised, the unsuccessful promoter’s offer is substantially altered at a stage subsequent to the award, an amendment expressly prohibited by EU law (and on which the Court of Justice has already ruled on several occasions: see judgments of 13 June 2024, BibMedia, C-737/22, EU:C:2024:495; 25 April 1996, Commission v Belgium, C-87/94, EU:C:1996:161).

The Court also found the pre-emption right incompatible with the freedom of establishment under Article 49 of the Treaty on the Functioning of the European Union, insofar as the advantage granted to the promoter is liable to discourage economic operators from other Member States from participating in project financing procedures, thereby producing an anti-competitive effect. Finally, the Court excluded that such regime could be justified on grounds of efficiency and cost-effectiveness of administrative action and subsidiarity, objectives typically associated with project financing procedures, in which the private operator bears the costs of works and services of public interest, as well as of the design phase preceding the tender. These principles, in fact, do not fall within the exhaustive list of derogations from the freedom of establishment under EU law.

The Court of Justice ruled only on the incompatibility of the former project financing framework. In the meantime, the Italian legislature has sought to address the issue by amending Article 193 of Legislative Decree No. 36/2023, introducing a sort of simplified public tender procedure for the selection of the promoter. However, on the one hand, the Court of Justice’s reasoning may also apply where the promoter is selected through such competitive procedure. The Court’s judgment of 5 February 2026 is based on the “distortion” of the tender process caused by the pre-emption right, a factor which is independent of the method used to select the holder of the pre-emption right. On the other hand, the European Commission has initiated infringement proceedings against Italy, also contesting that the promoter selection procedures fail to comply with the minimum requirements of transparency and impartiality under EU law (the initiation of the infringement procedure, concerning a number of provisions of the current Public Contracts Code, is available here).

The issue therefore also arises in relation to the current version of Article 193 of Legislative Decree No. 36/2023. In any event, it is worth considering more broadly the potential impact of the judgment on the use of project financing at the initiative of a private operator. If, as we believe, the judgment marks the end of the pre-emption right, it is not a given that the institution of project financing will suffer the same fate. It is time to consider that the essential element of this procedure lies in the possibility granted to private operators to design, or, in most cases, even conceive, a public work or service. The freedom of initiative of private operators is rooted in Article 41 of the Italian Constitution, with a driving force that constitutes a unique feature in the current public procurement framework. In the past, this prerogative gave the parties submitting the proposal a clear advantage over other market operators, since the contracting authority could assess the proposal, deem it to be of public interest or feasible, and proceed to launch the tender without ever inviting other potential bidders. However, the provisions introduced by the so-called Corrective Decree ensure, from the outset, the possibility of comparing multiple proposals, thereby increasing the transparency of the procedure. It is clear that, for private operators, the risks associated with a potential failure of the initiative increase significantly, together with the substantial costs of the preliminary phase, which are nevertheless mitigated by the statutory possibility of submitting a simplified project.

However, it cannot be overlooked that any public tender procedure, launched on the basis of the promoter’s project and the other documents forming part of the proposal, including the summary of the economic and financial plan, would take place in a context where the aforementioned operator would enjoy a form of “substantive pre-emption right” stemming from the competitive advantage ensured by its full knowledge of said documents (and of any scope for their optimisation). Such an advantageous position is further reinforced by the obligation to award project financing procedures on the basis of the criterion of the most economically advantageous tender, identified according to the best quality-price ratio.

Moreover, it is worth noting that, the Court of Justice, in the judgment under review, did not call into question the right of the unsuccessful promoter to reimbursement of costs incurred in preparing the proposal – up to a maximum of 2.5% of the investment value, pursuant to Article 193 of the current Public Contracts Code – at the expense of the successful tenderer.

These factors are likely to be particularly attractive to more structured operators, willing to assume risk and equipped with adequate financial resources.

In conclusion, while the abolition of the pre-emption right may act as a barrier, making project financing less viable than in the past, it may also represent a new beginning for project financing, which could evolve towards transactions supported by the legal, economic, and technical prerequisites whose absence has often, in the past, led to the failure of hundreds of initiatives and to an enormous waste of public and private resources.

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With decision No. 7414 of 19 September 2025, the Council of State established important and innovative principles concerning plants accessing incentives through registration in the GSE electronic register (in this case, Ministerial Decree of 6 July 2012). 

In particular, the two main novelties introduced by the aforementioned decision are: 

1. the irrelevance of the material error related to the indication of the plant’s capacity as a priority criterion where such an error does not result in any undue advantage for the operator and, indeed, may prove disadvantages for its ranking position for having indicated a capacity higher than that authorised; 

2. the applicability of tariff reduction instead of revocation for plants included in the ranking even in the absence of the execution of the GSE Agreement.

In this case, the applicant Municipality, in its application for registration under the incentive scheme provided by the Ministerial Decree of 6 July 2012, due to a mere typing error, indicated a higher capacity than that resulting from the concession title (namely, 226 kW instead of 152 kW). 

For this reason, following the checks carried out after the inclusion of the plant in an eligible position in the ranking, the GSE, having found a discrepancy between the capacity declared during registration (226 kW) and the authorised nominal capacity (152 kW), declared the revocation of the incentives for having provided untruthful information concerning the priority criterion laid down in Article 10 paragraph 3 letter g) of the Ministerial Decree of 6 July 2012, relating to the ‘lower capacity of plants’. 

According to the judges of the Council of State, the error made by the operator in indicating the actual capacity of the plant (226 kW instead of 152 kW) did not entail any violation of the priority criterion set out in Article 10 paragraph 3 letter g) of the Ministerial Decree of 6 July 2012, nor any undue advantage for the Municipality in the ranking, since the indication of a higher capacity than that actually authorised disadvantaged the entity in its ranking position (as lower capacity is one of the hierarchical criteria to be followed in drawing up the ranking), to the point that it moved from position No. 111 (which it would have obtained by indicating the correct capacity) to No. 135. 

In essence, the administrative judges, adopting a substantive approach, held that there was no relevant violation by the Municipality, which had not gained any competitive advantage as a result of a material error in typing the capacity, since ‘the error committed was not decisive in obtaining any concrete advantage over other competitors and must reasonably be regarded as the result of an involuntary occurrence’. 

In the same decision, the Court also addressed the issue of the interpretation of Article 42 paragraph 3 of Legislative Decree No. 28/2011, which provides that ‘in order to safeguard the production of energy from renewable sources, thermal energy and the energy savings resulting from efficiency measures, for plants which at the time of verification of the violation receive incentives, the GSE shall apply a reduction of the incentive between 10 and 50 per cent depending on the seriousness of the violation’. 

In this case, the Municipality, following its admission to the ranking list, set the investment in order to activate the plant, whereas it was then subject to the measure by which the GSE imposed the forfeiture of incentives. 

For the Council of State, there is no doubt that the plant falls within the scope of Article 42 paragraph 3 of Legislative Decree No. 28/2011, which governs ‘the fate of plants receiving incentives at the time of verification of the violation, without requiring that for the application of the reduction the agreement must already have been executed’, and therefore ‘a different interpretation intended to add a factual element not provided by the legislator, besides being praeter legem, would arbitrarily and unreasonably prejudice the purposes of safeguarding the production of energy from renewable sources, expressly referred to by Article 42 paragraph 3’. 

Indeed, based on the literal wording of the provision, the administrative judges held that the GSE should have applied a reduction of the incentive instead of revocation, since excluding the reduction in favour of revocation would prejudice the purposes of safeguarding the production of energy from renewable sources referred to in Article 42 paragraph 3 of Legislative Decree No. 28/2011, considering irrelevant the actual receipt of the incentives but focusing instead on conduct that induced the operator to believe the plant was eligible to receive them. 

These are highly relevant principles that protect the operator’s good faith, who possesses all the necessary requirements to access the incentives and who, due to a mere material error, has not gained any competitive advantage, excluding the applicability of the more severe sanction of revocation in favour of a reduction of the incentive, even for those who have been admitted to an eligible position in the ranking but have not yet executed the related agreement with the GSE.

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From the upcoming FER X auctions to the latest clarifications on the PPA market, and updates on agrivoltaics, white certificates, and Data Centers — this newsletter provides timely insights for energy market operators and stakeholders.

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In this regard, the following is a concise and schematic summary of the main regulatory changes that have taken place along with some preliminary comment about their potential practical implications.

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1. Thermomechanical electric storage systems 

Pursuant to Art. 3-quinquies of the Bollette Decree, in addition to electrochemical storage systems, thermomechanical electric storage systems are also expressly included among the interventions subject to the PAS regime set forth in All. B, Sec. I, lett. aa) and the Single Authorization regime set forth in All. C of the Renewables Consolidated Decree. To that effect:

• interventions related to thermomechanical electric accumulators located within specific areas (e.g., within the perimeter of existing industrial plants or power generation facilities; within quarry areas, etc.) and upon the fulfillment of certain conditions (e.g., the intervention does not require variations to adopted urban planning instruments, etc.) are subject to PAS;

• shall be subject to AU of regional competence the interventions related to thermo-mechanical electric accumulators: (a) connected or subservient to electric power generation plants with a capacity of 300 MW or less authorized but not yet built; (b) located in areas other than those described above and related to the PAS regime and capable of autonomously providing services for the benefit of the national electricity grid, with a capacity of 200 MW or less;

• shall be subject to AU of state jurisdiction the interventions related to thermomechanical electric accumulators: (a) connected or subservient to electric power generation plants of more than 300 MW authorized but not yet built; (b) located in areas other than those described above and related to the PAS regime of more than 200 MW. 

Furthermore, as to storage systems Art. 3-sexies of the Bollette Decree provides that the MASE, subject to the stipulation of a special agreement, can make use of the GSE in relation to authorization procedures concerning so-called storage systems.

The above with the aim of streamlining the related administrative processes.

Therefore, on the one hand, the categories of storage systems subject to the regulations of the Renewables Consolidates Decree are expressly supplemented and, on the other hand, the assistance of the GSE is provided to expedite the administrative proceedings functional and related to the implementation of such projects. 

2. Hydropower storage through pure pumping

Art. 4-bis, co. 1, lett. a, num. 2, of the Bollette Decree amends art. 9, co. 13 of the Renewables Consolidated Decree, the provision of which now stipulates that, also for hydroelectric storage plants through pure pumping, within the scope of the relevant AU proceedings (of state competence) both the Ministry of Infrastructure and Transport and the region concerned shall express their opinion in the services conference.

In this case, too, therefore, the range of public administrations to be involved is extended by expressly stipulating that the region affected by the relevant project must also be heard for the purposes of the permitting process.

3. Offshore power plants

Similar amendments are introduced with regard to offshore projects.

Specifically, it is provided that in AU proceedings related to off-shore facilities (under state jurisdiction) not only the Ministry of Infrastructure and Transport and the Ministry of Agriculture and Food Sovereignty (for aspects related to marine fisheries) but also the relevant coastal region concerned must be heard at the service conference. 

The same applies to upgrades, repowering, refurbishment, reactivation and reconstruction, replacement or reconversion of existing or authorized plants involving a total capacity of more than 300 MW (see Art. 9, para. 13, TU Renewables as amended by Art. 4-bis, para. 1, letter a), num. 1 of the Bollette Decree).

4. Hydroelectric  

It extends the regime of free activity to hydroelectric plants with a generating capacity of less than 500 kW of concession power and that comply with specific technical-urban requirements (e.g., built on existing pipelines without increase nor of the existing flow rate; do not involve changes to the intended use, etc.) (see Art. 4-bis, co. 1, letter b) of the Bollette Decree). 

The objective is to attempt to facilitate the development of certain hydropower projects that, due to their technical/design characteristics, are suitable to undergo a particularly simplified process.

In general terms, it should be noted that the PAS regime is provided for hydropower plants of <100 kW capacity and the AU in the case of plants above this threshold.

5. Agri-voltaic power plants 

Art. 4-bis, para. 1, lett. c) of the Bollette Decree removed the reference to agri-voltaic plants from Annex B, Sec. I of the Renewables Consolidated Decree.

The previous version established that solar photovoltaic or agrivoltaic systems with a capacity of up to 1 MW were subject to PAS.

This change would seem to have been made essentially to address the discordance of this provision with All. A of the Renewables Consolidated Decree, according to which the “free activity regime” applies to agri-voltaic plants of less than 5 MW, and which allows for the continuity of agricultural and pastoral activity.

6. Wind power plants 

As anticipated, the amendments introduced through the Bollette Decree produce reflections not only on permitting processes but also on environmental ones.

Specifically, Art. 4-bis, para. 2, supplemented Annex IV of the Environmental Code by providing that projects for the refurbishment or repowering of existing, licensed or authorized wind power plants to be built on the same site and involving an increase in capacity of more than 30 MW are subject to regional EIA screening. 

It should be noted that this capacity threshold, in line with what was clarified by the MASE (Protest Prot. 65335 of April 24^th, 2023) shall be calculated on the basis of the project under evaluation only and excluding any plants or projects located in contiguous areas or that have the same center of interest or the same connection point and for which an environmental impact assessment is already underway or an environmental compatibility measure has already been issued.

It should also be noted that under recent administrative jurisprudence (Lecce Administrative Court, Judgments Nos. 11/2025 and 935/2024), for the purposes of cumulation, only projects undergoing authorization should be considered, and not also plants insisting in contiguous areas already built and in operation.

7. EIA priority projects

Pursuant to Art. 4-quater of the Bollette Decree, the list provided under Art. 8 of the Environmental Code is supplemented by establishing that power generation plants from renewable sources subject to single authorization under state jurisdiction as per All. C, Sec. II of the Renewables Consolidated Decree (e.g., plants with a capacity >300MW; offshore, etc.) are also to be considered as priority projects. 

Thus, the list of project categories to be prioritized in the context of the order of processing EIA proceedings under the responsibility of the PNRR-PNIEC Technical Commission is expanded.

***

The innovations introduced by the Bollette Decree would seem to be largely directed at broadening the range of institutional actors to be involved in the context of relevant authorization procedures for the development of renewable projects.

The reference is to the projects of thermomechanical electric storage, hydroelectric storage through pure pumping, and off-shore plants for which the involvement of the GSE and/or interested regions is envisaged.

Purely theoretically, the increase in institutional stakeholders at the authorization tables could make the completion of administrative processes less expeditious.

On this point, however, it seems premature to take a definitive position; in fact, the application implications of the regulatory innovation will have to be observed in order to assess whether it will benefit market operators in terms of greater efficiency and speed of the procedures of their interest.

Of a different tenor and of no marginal importance appear to be the changes concerning environmental proceedings.

In fact, the introduction of the 30 MW threshold for EIA screening of wind farm modifications would seem to sharpen the application perimeter of the rule, previously made opaque by, among other things, unspecified references to the production of significant and negative environmental impacts (see Art. 6, para. 6 of the Environmental Code).

One can also look favorably on the inclusion among the priority projects, for the purposes of EIA proceedings, of those subject to state AU under the Renewables Consolidated Decree.

In relation to this last profile, however, it seems appropriate to emphasize that this amendment is in the wake of recent administrative jurisprudence, which has clarified on several occasions that this priority criterion is not in itself capable of derogating from the obligation to conclude all EIA proceedings instituted before the Technical Commission (i.e., not only those "priority" proceedings) within the peremptory deadlines established by law (on this point, see our commentary on the recent Council of State ruling, April 22, 2025, no. 3465). 

As is known, in EIA procedures under state jurisdiction, the Ministry of the Environment and Energy Security (MASE), as the competent authority, adopts the measure of environmental compatibility on the project after obtaining the agreement of the MiC, in accordance with the provisions of Article 25 of Legislative Decree No. 152/2006.

In particular, with reference to the PNRR projects, art. 25, paragraph 2 bis, of the Legislative Decree no. 152/2006, establishes that the PNRR-PNIEC Technical Commission expresses its opinion ‘within the term of thirty days from the conclusion of the consultation phase referred to in Article 24 and in any case within the term of one hundred and thirty days from the date of publication of the documentation referred to in Article 23, preparing the outline of the EIA measure. Within the following thirty days, the director general of the Ministry of Ecological Transition adopts the EIA measure, after obtaining the agreement of the competent director general of the Ministry of Culture within twenty days'.

In other words,the aforementioned provision outlines a procedure whereby, once the preliminary investigation phase has been completed, the PNRR-PNIEC Technical Commission renders its opinion on the environmental compatibility of the project, which is then brought to the attention of the MiC for the relative assessment. The Ministry is called upon to express its opinion within the peremptory term of twenty days from receipt of the draft measure rendered by the PNRR-PNIEC Technical Commission.

Until the recent pronouncements, it often happened that the MASE waited for several months for the expression of the MiC's consent, the lack of which led to a real deadlock in the procedure that could not be overcome except by bringing an action on the silence before the Administrative Judge.

The most recent administrative case law, starting from the interpretation of the Council of State (cf., Sec. IV, sentence no. 8610/2023) with reference to the silence of the Superintendence within the landscape compatibility procedure, has, instead, deemed applicable the institute of the silence consent between Administrations (so-called horizontal silence consent) pursuant to Article 17 bis of Law 241/1990, also in the case of a Statal EIA procedure.

Article 17 bis, in regulating the effects of inaction between public administrations, introduces the institution of horizontal silence of consent once the time limits granted by law for the issue of an opinion have elapsed. This institute, by express provision of paragraph 3, also applies in cases where sensitive interests are at stake and, therefore, in cases where the acquisition of consents, concerts or nulla osta of administrations in charge of the protection of the environment, the landscape or the cultural heritage’ is required. 

Substantially, the most recent administrative case law stigmatizes the illegitimacy of opinions and technical-instructional contributions adopted in violation of peremptory terms of the law, excluding their preclusive scope with respect to the conclusion of the procedure and, on the contrary, recognising that delay as silence consent between administrations once the terms for the issue of opinions have elapsed, since the delay cannot entail an indefinite suspension of the EIA procedure in damage of the applicant.

The Regional Administrative Court, upholding the appeal brought against the denial measure issued at the end of the simplified authorization procedure for the construction of photovoltaic plant, with a nominal capacity of 4MW, rejected the Administration's argument that the project did not fall within a suitable area because it was more than 500 meters away from industrial plant, since the Terna station had to be consider as “technological infrastructure.”

Recalling some rulings of the Supreme Court that have recognized the “industrial” character of the activity related to the production of energy developed by wind farms and hydroelectric power plants (see Cass. civ, Sec. V, ruling Nos. 14042/2020 and 14007/2024), the Court considers that the notion “industrial plant” should be interpreted “not in a restrictive sense - that is, as an industrial activity functional to the transformation of materials into new products - but also as an activity aimed at the transformation of hydrostatic potential energy into kinetic energy and, therefore, into electrical energy”. 

The Regional Administrative Court points out how, the reason behind Art. 20 paragraph 8 letter c ter) Legislative Decree 199/2021 - which establishes, even if transitory, the criteria relating to the identification of areas suitable to host the installation of photovoltaic plants - is based on the need to “promote urban decorum and therefore to concentrate, where possible, renewable energy plants in areas already with a strong urban impact”.

The Lazio Regional Administrative Court, therefore, further extends the concept of “industrial plant”, in a sense not dissimilar to what the MASE had already done, with answer no. 130318 to the interpellation of the Municipality of Villalba, last 8 August 2023, recalling in the definition of “establishment” provided in art. 268, paragraph 1, letter h) of Legislative Decree, 3 April 2006, No. 152, recognizing the nature of “industrial establishment” also to ground-mounted photovoltaic plant with a nominal capacity exceeding 20 kW, considering that even a photovoltaic plant can be identified as a “unitary and stable complex or industrial establishment since it is made up of a set of, for example, modules, inverter, storage system, monitoring system that are interconnected as an overall production cycle, and that the qualification of establishment also refers to the place used in a stable manner for the exercise of one or more activities”.

The FER-X Transitional Decree has been signed but has not yet been published (and therefore has not yet come into force) by the Ministry of Environment and Energy Security in implementation of Articles 6 and 7 of Legislative Decree No. 199/2021. Its goal is to support the production of electricity from renewable energy sources with costs close to market competitiveness.

2. Scope of Application

The Decree applies to electricity generation plants powered by:

• Photovoltaic

• Wind

• Hydroelectric

• Residual gases from purification processes

Agrivoltaic systems are also eligible for incentives, as they fall under the photovoltaic category. However, they do not benefit from any additional incentives or priority criteria for admission to the incentive mechanism.

The scope of application also includes full and partial revamping, as well as upgrades of existing plants, but only for the newly added section attributable to the upgrade.

The validity of the Decree is transitional, expiring on 31 December 2025, unless the power quota for plants larger than 1 MW is exhausted earlier. For plants with a capacity below 1 MW, the Decree will cease to apply 60 days after reaching the 3 GW power quota, if this occurs before 31 December 2025.

3. Support Mechanism

The Decree provides two ways to access incentives:

• Direct access for plants with a capacity ≤ 1 MW (provided they began construction after the FER-X transitional decree came into force).

• Competitive procedures (reverse auctions) for plants with a capacity > 1 MW, with assignment based on economic bids.

For plants with a capacity > 1 MW, the incentive mechanism operates only for 95% of the energy produced by the eligible plants.

The power quotas for small-scale plants amount to 3 GW, while the quotas for competitive procedures are:

• Photovoltaic: 10 GW

• Wind: 4 GW

• Hydroelectric: 0.63 GW

• Residual gas from purification processes: 0.02 GW

• Total: 14.65 GW

4. Selection Criteria and Priorities

Access to incentives is subject to compliance with environmental, technical, and economic requirements.

For plants with a capacity greater than 1 MW, a key requirement is the mandatory participation in the Balancing and Redispatch Market.

Other key requirements for these plants include:

• A valid permit for the construction and operation of the plant (producers can apply for competitive procedures with an environmental impact assessment approval if required).

• A final connection agreement and registration of the plant in Terna’s GAUDI system, validated by the grid operator.

• Compliance with performance requirements and EU/national environmental protection standards, including the “Do No Significant Harm” (DNSH) principle and Annex 3 requirements.

• Proof of financial solidity, which can be demonstrated by: 

  • A bank statement confirming the financial and economic capacity of the applicant.

  • Capitalization requirements (fully paid-up share capital and/or capital increase deposits) based on the investment value: 

    • 10% for investments up to Euro 100 million.

    • 5% for investments between Euro 100 million and Euro 200 million.

    • 2% for investments above Euro 200 million.

Plants larger than 1 MW that started construction before submitting their competitive procedure application are not eligible for incentives.

In case of excess applications compared to available quotas, priority criteria include:

• Removal of asbestos/eternit for photovoltaic plants.

• Full refurbishments and upgrades in agricultural areas without increasing occupied land.

• Location in areas classified as suitable by national regulations.

• Inclusion of storage systems to improve production scheduling.

• Long-term supply contracts (minimum 10 years).

• Earlier application submission date.

Applicants for competitive procedures must provide a temporary guarantee as project quality assurance and commit to providing a final guarantee within 90 days of the final ranking's publication.

The final guarantee is set at 10% of the investment cost based on the following technology-specific investment costs:

The temporary guarantee equals 50% of the final guarantee.

If an applicant withdraws within six months, 30% of the final guarantee is forfeited. If withdrawal occurs between six and twelve months, 50% is forfeited. If the deadline is missed entirely, the full guarantee is forfeited.

5. Incentive Modalities and Pricing

For plants <200 kW, GSE directly purchases and sells the electricity, providing a flat-rate tariff based on the awarded price. However, applicants can opt for the scheme used for plants ≥200 kW.

For plants ≥200 kW, support is granted through a two-way Contract for Difference (CfD):

• If the market price is below the awarded price, GSE compensates the difference.

• If the market price is higher, the producer reimburses the difference.

The market price is the day-ahead market price (PZ) from GME.

The awarded price depends on competitive bidding, but current reference "ceiling prices" are:

• Photovoltaic & Wind: €95/MWh

• Hydroelectric: €105/MWh

• Residual gas: €100/MWh

Additional price corrections:

• +€27/MWh for photovoltaic plants replacing asbestos/eternit.

• +€5/MWh for installations on water surfaces.

Market-negative or zero-price situations:

• For plants participating in the Balancing Market, incentives apply only to the electricity that could have been produced.

• For plants not in the Balancing Market, incentives are suspended for the negative/zero-price period.

In case of curtailment (production cuts), incentives apply only to curtailed volumes.

6. Construction Deadlines and Penalties

Plants must be operational within 36 months of the ranking's publication (except in force majeure cases).

Delays result in progressive tariff penalties:

• 0.2% per month for the first 9 months of delay.

• 0.5% per month for the following 6 months.

• After 15 months, eligibility for incentives is revoked.

• If the plant later reapplies for support, the tariff is reduced by 5%.

Failure to meet deadlines results in the forfeiture of the final guarantee.

7. Publication and Next Steps

The decree has not yet been published and will come into force the day after its publication on the Ministry of Environment and Energy Security (MASE) website.

Within 90 days of its entry into force, further regulations will be issued by GSE and ARERA, covering:

• ARERA: Setting auction prices for plants ≤1 MW.

• ARERA: Publishing reference "ceiling prices."

• ARERA: Technical and procedural rules for: 

  • Managing negative/zero prices and curtailment.

  • Enabling plants to participate in the Balancing and Redispatch Market.

The judgment is in accordance with a well-established in case law (on this point, ex multis, Regional Administrative Court of Lazio Region nos. 10162/2024, 11508/2024, 1385/2023, 12196/2023, 12641/2023; Council of State, no. 6060/2018) according to which the GSE's right of claim is subject to the ten-year limitation period and the day from which such right may be asserted cannot be postponed to the outcome of the verification and control proceedings but runs from the date of disbursement of each single payment made in favour of the incentivized plant, the public nature of the function concerning the regulation of the internal energy market and its incentive system being of no relevance. The only exception (expressly provided by Article 2941 no. 8 of the Italian Civil Code) is represented by the fraudulent intent of the beneficiary, which entails the suspension of the limitation period term until the fraud is discovered.

The task of verification and control can, in fact, be exercised by the GSE immediately after admission to the incentives, so only the GSE itself must be held liable for the failure (or delay) in exercising such powers. It follows that the timing and date of the start of the proceedings cannot result in the forward shifting of the dies a quo of the limitation period, on penalty of an undue postponement of the limitation period left to the discretion of the GSE.

Therefore, as things now stand, there is no dispute about the principle, which has already been established several times by administrative case law, according to which, on the one hand, in the presence of a verified circumstance of undue payment of the incentive tariff, the GSE cannot recover the sums paid out in respect of which the ten-year limitation period has already expired pursuant to Article 2946 of the Italian Civil Code, on the other hand, that that limitation period does not run from the date on which the GSE adopted the tariff reduction measure, but from the date of each single payment.

Below there are some of the most important novelties concerning environmental authorizations.

One of the aims of the Environmental Decree is to speed up the process of environmental assessments and authorizations by introducing a fast track for certain projects. On this point, by amending Article 8 of Legislative Decree No. 152/2006, the Environmental Decree includes among the projects to be given priority in the order of treatment by the State Technical Commission for Environmental Impact Assessment - EIA and SEA as well as by the PNRR-PNIEC Technical Commission, those “of pre-eminent national strategic interest pursuant to art. 13 of Decree-Law no. 104 of 10 August 2023, converted, with amendments, by Law no. 136 of 9 October 2023” and “those having the characteristics referred to in Article 30 of Decree-Law no. 50 of 17 May 2022, converted, with amendments, by Law no. 91 of 15 July 2022” . Among these, priority shall be given to the project types to be identified by decree of the Minister of the Environment and Energy Safety, in agreement with the Minister of Culture and the Minister of Infrastructure and Transport, taking into account the following criteria:

(a) reliability and technical and economic sustainability of the project in relation to its implementation;

b) contribution to the achievement of the decarbonization objectives set out in the PINIEC;

c) relevance to the implementation of the investments of the National Recovery and Resilience Plan;

d) enhancement of existing works, plants or infrastructure.

Pending the adoption of the decree, priority is to be given to, in order to: 

1. the projects of new hydroelectric storage plants by pure pumping that provide, also through the restoration of the conditions of normal operation of the existing reservoirs, an increase in the volumes of water that can be stored (provision added at the time of conversion);

2. the works and plants for geological storage, capture and transport of CO2, as well as their functionally connected plants, and industrial plants subject to conversion into biorefineries (provision added on conversion);

3. projects concerning green or renewable hydrogen installations referred to in number 6-bis) of Annex II to Part Two and related installations from renewable sources; 

4. projects for new installations concerning hydroelectric derivations with a capacity of up to 10MW (provision added on conversion);

5. revamping and repowering of plants powered by wind or solar sources;

6. on-shore photovoltaic and on-shore agri-voltaic projects with a nominal capacity of at least 50 MW and on-shore wind projects with a nominal capacity of at least 70 MW.

A quota of no more than three-fifths of the Commissions' processing is reserved for such projects, without prejudice to the chronological order of priority of the date of communication to the proponent of the publication of the documentation on the competent authority's website, which is valid for all projects, whether priority or not. 

To accelerating the assessment of projects, the Decree also provides that, in the event of delay in the issuance of the EIA measure, the President of the EIA-SIA Commission and the President of the PNRR-PNIEC Technical Commission may order the assignment of the project to the EIA-SIA Technical Commission, without prejudice to the application of the procedural discipline relative to the environmental impact assessments of PNRR and PNIEC projects.

Stringent and innovative provisions are introduced with reference to the EIA screening procedure pursuant to Article 19 of Legislative Decree No. 152/2006: 

(i) within fifteen days from the expiration of the term of 30 days from the communication to the interested administrations of the publication of the documentation on the portal, the competent authority may request clarifications and integrations from the proponent in order to exclude the submission of the project to the EIA procedure, assigning a term not exceeding thirty days, after which, in the absence of the requested integrations, the request is considered rejected

(ii) the competent authority adopts the measure of verification of subjection to EIA within 60 days from the date of expiration of the term of 30 days from the communication to the interested administrations of the publication of the documentation on the portal or, in the case of requests for clarifications or documental integrations, within 45 days from the receipt of the clarifications or integrations requested. In exceptional cases, the competent authority may extend, for a period not exceeding 20 days, the deadline for the adoption of the EIA screening measure, promptly notifying the proponent, in writing, of the reasons justifying the extension.

The Decree also provides that the measure of verification of subjectivity to EIA cannot have an effectiveness of less than five years, indicated in the measure itself, taking into account the expected time for the realization of the project, the necessary authorization procedures, and any proposal formulated by the proponent. Once this term has elapsed without the project having been carried out, the procedure must be repeated, without prejudice to the granting of a specific extension by the competent authority, at the request of the proponent accompanied by the relevant findings concerning the environmental context of reference and any changes, including design changes, that have occurred. Also in this case, within 15 days from the request, the competent authority may request additional documentation, assigning a peremptory term of no more than twenty days for the relative submission. If the documentation is again incomplete, the application shall be deemed withdrawn. Except in the case of a change in the environmental context of reference or modifications, including design modifications, the measure with which the extension is ordered does not contain prescriptions that are different and additional to those already provided for in the original measure of EIA subjectivity verification. If the petition is filed at least 90 days before the expiration of the effective date of the measure, the latter continues to be effective until the competent authority adopts the determinations relating to the granting of the extension. 

The Environmental Decree then introduces, as a partial exception to the general principle under Law No 241/1990 - according to which silence-consent does not operate in environmental matters -,  the mechanism of silence-consent in relation to the acceptance of the request to suspend the procedure up to a maximum of 12 days in the event that, as a result of the consultation or the submission of counter-deductions by the proponent, it becomes necessary to amend or supplement the project documents or the documentation acquired. The aforementioned request is deemed to have been granted if the EIA-SIA Commission or the PNRR-PNIEC Technical Commission remains silent after seven days from the suspension request.

A further novelty concerns the verification by the Ministry of Culture of the adequacy of the landscape report attached to the EIA (art. 24, paragraph 5, Legislative Decree 152/2006). Also in this case, with the identical mechanism foreseen before the Technical Commissions, in the event of a request for integration, if the proponent does not respond within the time limit indicated by the authority (in any case not exceeding 30 days, extended by a further 30 days at the proponent's request), the EIA petition is automatically considered rejected and the Ministry of Culture notifies the proponent and the competent authority, which is obliged to proceed with the filing.

With the aim of affecting the recent jurisprudential orientations of the Council of State (ex multis, Council of State. nos. 7299/2024, 4098/2022), for which it can be considered that the landscape authorization is included in the scope of the EIA measure issued by Resolution of the Council of Ministers pursuant to Article 5, paragraph 2, lett. c-bis) of Law 400/1988, the Decree also introduces art. 25, paragraph 2-quinquies of Legislative Decree 152/2006, providing that the agreement of the competent director general of the Ministry of Culture includes the landscape authorization where the landscape report allows a positive assessment of the landscape compatibility of the project. The Ministry of Culture is also required to adequately justify any rejection and, in the event of a favourable opinion of the VIA-VAS Technical Commission or PNRR-PNIEC Technical Commission, Article 5, paragraph 2, letter c-bis) of Law 400/1988 may be applied, overriding the disagreement with a Resolution of the Council of Ministers that replaces to all effects the favourable EIA measure and includes the landscape authorisation where the landscape report is complete and allows a positive assessment of landscape compatibility.

Lastly, the conversion law amended the provision of the Environmental Decree that had most worried operators in the version published in the Official Gazette, last 18 October: in paragraph 2 of Article 1 it was, in fact, provided that ”for projects of energy production from renewable sources, the proponent shall attach to the EIA application pursuant to Article 23 of Legislative Decree No. 152 of 2006 also a declaration certifying the legitimate availability, for any reason, of the surface and, if necessary, of the resources necessary for the implementation of such projects”.

The provision seemed to make it necessary for all renewable energy production projects involving recourse to the EIA procedure, the immediate demonstration of the availability of the surface area affected by the plants.

This claim, however, appeared, from the outset, to be completely unreasonable, considering the expense commitment (the acquisition of the availability of the land) in an completely transitory project phase, also considering that during the EIA procedure itself there are frequent requests by the authorities to move the plant components and the relative connection works. At the same time, the regulation appeared to fail to take due account of the circumstance that the availability of areas is often necessarily obtained after the authorization phase through subsequent expropriation - as often happens in the case of wind power - or public concession on state land - in the case of hydroelectric power -.

The conversion law has fully replaced the aforementioned paragraph 2 of Article 1, providing that for energy production projects from photovoltaic, thermodynamic solar, biomass or biogas sources, as well as the production of biomethane (thus excluding wind and water sources), the proponent of the EIA measure must attach a self-declaration attesting to the legitimate availability, for any reason whatsoever, of the area on which the plant is to be constructed, without prejudice to the consequent procedures for the interconnection works.

The Operating Rules, issued by the GSE, provide the necessary information for the fulfilment of the provisions of FER 2 and, in general, of the relevant legal and regulatory framework.

The document illustrates the timeframes and processes for conducting the planned competitive procedures, the modalities for reallocating any unallocated production capacity, and the terms and fulfilments required for participation in the procedures and for inclusion in the rankings. The criteria for the formation of the rankings and the reasons for exclusion are also regulated, as well as the effects of renunciations and the reasons which, if ascertained after the start of operation, during the evaluation phase of the request for access to the incentives, lead to the forfeiture of the ranking list.

Each competitive procedure corresponds to 

• a public tender;

• a production capacity quota, expressed in MW, for each procedure envisaged, to be allocated to the plants participating in the procedure;

• a ranking list, drawn up by the GSE as a result of the selection of projects and which takes into account any percentage reduction offered with respect to the reference tariff used as a basis for the competitive procedure and any application of priority criteria.

FER 2 provides for nine types of procedures, depending on the type of plant and the category of intervention. The types of plants allowed are

• biogas plants with a nominal capacity of no more than 300 kW of electricity

• biomass plants with a nominal capacity of no more than 1,000 electric kW;

• thermodynamic solar plants of any power;

• offshore floating wind power plants and offshore wind power plants on fixed foundations with a minimum distance from the coast of 12 nautical miles, of any power;

• off-shore floating photovoltaic installations and off-shore floating photovoltaic installations on inland waters, of any power;

• tidal, wave and other marine energy installations of any power; 

• geothermal plants, conventional with innovations or with zero emissions, of any power.

FER 2 aims to support the realization of a total of 4.6 GW between 2024 and 2028.

Feed-in tariffs vary between 100 €/MWh and 300 €/MWh depending on technology and power. The technology on which the Decree focuses most is offshore wind power with 3.8 GW.

In order to participate in the auctions, one must be in possession of a permit (or favourable environmental impact assessment, where applicable) and a definitively accepted interconnection solution. Certain minimum environmental and performance criteria must then be met. 

Both new construction projects and, for traditional geothermal plants with innovations only, projects for the revamping of existing plants are admitted to the procedures.

Each competitive procedure remains open for a period of 60 days from the date of publication of the notice on the GSE website, and the relative rankings are published within 90 days of the closing date.

In the event of non-saturation of the power quota, the GSE, for each type of procedure, in order to reallocate the available resources, provides for mechanisms to reallocate the unallocated power: in each competitive procedure the unallocated residual power quota is allocated to the quota of the first subsequent procedure, until the quotas are exhausted.

In addition, the GSE will assess the possibility of reallocating the power quota related to plants that were admitted in a useful position in a previous ranking and for which the applicant has submitted a waiver.

A mechanism for checking and supplementing applications is envisaged. Nonetheless, no responsibility can be attributed to the GSE, for failure to report inaccuracies or documental deficiencies, in respect of alleged errors committed at the time of the application for registration to the competitive procedures or of incorrect transmission of the mandatory documentation by the applicant, as the principle of ‘preliminary relief’ cannot be applied.

Failure to prove possession of the requirements and/or priority criteria declared during the registration phase shall result in exclusion from the ranking list.

FER 2 provides for the possibility (for plants with a capacity of up to 300 kW) or obligation (for plants with a capacity of over 300 kW) for applicants to make an offer of a percentage reduction in the reference tariff. If the reduction offered is equal, and the quota is saturated, the other priority criteria provided for by the decree will be taken into account:

a. plants built in the areas identified as suitable in implementation of Articles 20 and 23 of Legislative Decree No. 199 of 2021;

b. earliest date of completion of the application for participation in the procedure.

The percentage reduction offer must be greater than or equal to 2%, for plants with a power exceeding 300 kW. For each type of procedure, the reference tariff is that set out in Annex 1 to FER 2, reduced by 3% per year from 2025. For plants with power up to 300 kW, this reduction applies from 2026.

For plants that have been placed in a good position in the rankings published after the respective competitive procedures, FER 2 envisages, based on the source, the category of intervention and the type of applicant, compliance with precise time limits for entry into operation for the purpose of accessing the incentives; subsequent to entry into operation, the applicant may apply for the incentive.

The document also regulates the phase of requesting recognition of the incentive, the relative procedure of evaluation and verification, the determination of the tariff, the activation of contracts, and the subsequent modalities for disbursement of the incentive, also providing for specific conditions of cumulability with other measures as well as the system of verifications and controls.

The FER 2 provides for two types of incentives: an all-inclusive tariff or an incentive, calculated as the difference between the due tariff and the hourly zonal energy price (referring to the market zone where the electricity produced by the plant is fed into the grid). In the event that the difference is positive, the GSE disburses the incentives in an amount equal to the aforementioned difference, on the incentivized energy, i.e. on the net production fed into the grid. In the event that the value of the incentive is negative, the GSE will request the restitution of this differential by means of an adjustment, offsetting against other items pertaining to the same entity or direct payment. Plants with a capacity of less than or equal to 300 kW may opt for one or the other type. For plants with an output of more than 300 kW, only the incentive will be recognized.

In the case of the all-inclusive tariff, the consideration paid includes the remuneration of the energy produced and fed into the grid, which is collected by the GSE; in the case of the incentive, the energy produced and fed into the grid instead remains at the producer's disposal.

The first tender for tenders opened on 16 December for biogas and biomass plants for a quota of 10 MW and will close at 12 noon on 14 February 2025.

The timetable for subsequent procedures will be approved by the Ministry, based on the proposal of the Manager, by 31 March 2025 and communicated by the GSE two months before the opening of each procedure.

The decree envisages at least one procedure per year for biogas and biomass and at least three procedures over the entire period, i.e. until the end of 2028, for other technologies.

The measure has been in force since 6 December, i.e. the day following its publication, and is applicable not only to plants whose authorization procedure was commenced after the date of entry into force of the law, but also to plants whose authorization procedure is underway and even to plants already authorized that have not implied an irreversible change to the state of the sites, whose authorization titles will be ineffective. 

The law provides for the abrogation of the previous regional law of 3 July 2024, no. 5, concerning ‘Urgent measures for the protection of the landscape and environmental assets’, introducing the so-called ‘Sardinian moratorium’, and, consequently, the withdrawal of the challenge to its legitimacy raised by the Council of Ministers before the Constitutional Court.

Sardinia is thus the first Italian region to have implemented the ‘Suitable Areas Decree’, with the ‘declared’ aim of identifying ‘suitable areas and suitable, unsuitable and ordinary areas, in order to favour the ecological, energy and climate transition’, guaranteeing the minimization of the environmental and landscape impact of renewable energy plants, as well as their spatial planning in compliance with both the EU's decarbonization and energy transition obligations and the regional overall power objectives, with the aim of maximizing the areas to be identified in order to facilitate the regional overall power objectives to be reached by 2030, as set out in the Decree on Suitable Areas.

In order to be able to identify the areas and surfaces suitable and unsuitable for the installation and promotion of renewable energy source plants, the measure firstly provides for the primary differentiation between plant sizes, identifying 

a. small size plants in photovoltaic, thermodynamic, and agri-voltaic plants with a nominal power less than or equal to 1 MW; wind power plants with a maximum overall height less than or equal to 20 meters; power generation plants from biomasses, landfill gas, residual gas from purification processes and biogas with a nominal power less than or equal to 200 kW; geothermal plants with a temperature of the fluid found less than or equal to 90 degrees centigrade; in storage plants with a nominal installed power less than or equal to 500 kW;

b. medium size plants in photovoltaic, thermodynamic, agri-voltaic plants with a nominal capacity greater than or equal to 1 MW and less than or equal to 10 MW; wind power plants with a total maximum height greater than 20 meters and less than or equal to 100 meters; biomass, landfill gas, sewage treatment plant gas and biogas power generation plants with a nominal capacity greater than 200 kW and less than or equal to 1 MW; geothermal power plants with a temperature of the fluid retrieved greater than 90 degrees centigrade and less than or equal to 150 degrees centigrade; storage plants with a nominal installed capacity greater than 500 kW and less than or equal to 1.2 MW;

c. large size plant in photovoltaic, thermodynamic, agri-voltaic plants with a nominal capacity exceeding 10 MW; wind power plants with a total maximum height exceeding 100 meters; power generation plants from biomass, landfill gas, sewage treatment plant gas and biogas with a nominal capacity exceeding 1 MW; geothermal power plants with a temperature of the fluid retrieved exceeding 150 degrees centigrade; storage with a nominal installed capacity exceeding 1.2 MW.

In consideration of the different plant sizes in Annexes A, B, C, D and E, as well as paragraphs 9 and 11, art. 1, L.R. 20/2024, unsuitable areas are therefore identified, in a far greater number than the suitable ones, identified, instead, in Annex F as follow

a) disused industrial areas, with the exception of large-scale wind farms

b) urban and special waste landfill areas, exclusively in the service areas outside the landfill body, limited to photovoltaic plants and small and medium sized wind farms

c) for the installation of photovoltaic plants, the sites and plants at the disposal of the Italian State Railways group companies and railway infrastructure managers

d) port areas, excluding marinas, limited to photovoltaic and wave energy production plants

e) airport areas, limited to photovoltaic plants

f) the areas pertaining to major roads already subject to transformation, limited to small-scale photovoltaic systems

g) limited to photovoltaic plants and small and medium sized wind power plants, first and second category quarrying areas

h) the areas of sites subject to reclamation proceedings, limited to photovoltaic plants and small and medium sized wind farms as well as biomass plants

i) the sections of water of the basins of the Regional Multi-sector Water System, as identified by the Water System's managing body, not used by fire-fighting aerial vehicles, and relevant appurtenances, limited to hydroelectric plants and floating photovoltaic plants up to 10 MW

j) for photovoltaic installations and small and medium-sized wind power plants, homogeneous urban planning zones D and zones G for commercial and logistical use

k) with the exclusion of large wind power plants, the industrial areas managed by the provincial industrial consortia, the industrial areas of regional interest, and the PIPs referred to in Article 27, Law No 865 of 22 October 1971

l) the homogeneous urban planning zones G referred to in Decree No 2266/U of 20 December 1983 of the Regional Councilor for Local Authorities, Finance and Town Planning for renewable energy, with the exception of large-scale wind farms

m) for the installation of photovoltaic systems, the infrastructure areas of the homogeneous urban planning zones G relating to the transport sector (roads, railways, ports and airports), excluding marinas, and to technological installations (waste cycle, water cycle, drinking water purifiers, sewage treatment plants, lifting plants, energy cycle)

n) limited to the installation of small and medium sized wind farms, the infrastructure areas of the homogeneous urban areas G, relative to technological plants (waste cycle, water cycle, drinking water purifiers, sewage treatment plants, lifting plants, energy cycle).

Each hypothesis contains specific technical conditions to which the construction of the plants is subject.

The construction of RES plants and storage facilities, regardless of whether they are located in eligible areas or in ordinary areas, is also subject to compliance with the requirements and prescriptions set forth in Annex G, as well as to compliance with the specific territorial, urban planning, construction, landscape, with particular reference to the Regional Landscape Plan, environmental and technical prescriptions pertaining to the area and the plant subject of the authorization application.

As provided for by Art. 1, paragraph 4, with regard to photovoltaic plants, without prejudice to compliance with the applicable territorial, town planning, building, environmental and landscape regulations, with particular reference to the provisions contained in the Regional Landscape Plan (PPR) and in the other town planning instruments, as well as the technical requirements per type of plant set forth in Annex G of the same regional law, suitable areas are identified as ‘the roofing surfaces of buildings, such as, by way of example and not limited to, buildings, canopies, pergolas, shelters, public and private, of any kind, legitimately built or to be built in compliance with the provisions of the town planning instruments, and the relevant cumulation systems’. Of particular relevance, moreover, is the subsequent clarification according to which, regardless of the recognition of suitable, unsuitable or ordinary areas (those for which the construction of RES plants is subject to case-by-case verification), ‘the construction of small-scale geothermal plants is always allowed, for which the authorisation discipline provided for by the regulations in force on suitable areas applies’.

The law also specifies, in the first part of paragraph 7, art. 1, that ‘if a plant project falls in an area included both in the areas defined as suitable, as per annex F, and in the areas defined as unsuitable, as per annexes A, B, C, D and E, the unsuitability criterion prevails’, while the restoration, complete reconstruction work on plants built before the law came into force and in operation in areas defined by the law as unsuitable, ‘are allowed only if they do not entail an increase in the gross occupied surface area and, in the case of wind farms, an increase in the total height of the plant’.

A further provision, Article 2 of the regional law, provides for the establishment, as from 2025, of a fund - fed by regional, national and European resources, with an initial endowment of Euro 678,000,000 for the years from 2025 to 2030 - for the granting of incentive measures, ‘both through the disbursement of non-repayable grants and through the use of financial instruments or through their combination’, in order to support the interventions aimed at the installation of photovoltaic and electricity storage systems for self-consumption and carried out by, in compliance with the requirements set forth in the same regulatory provision, (i) natural persons resident in Sardinia (ii) businesses and professionals with their operational headquarters in Sardinia; (iii) energy communities and other forms of self-consumption and sharing; (iv) municipalities, union of municipalities, provinces, metropolitan cities; (v) other regional, territorial public entities. These incentives are granted by means of an assessment procedure following a call for tenders, with special measures aimed at promoting energy communities.

The law also provides for simplification and acceleration measures for the promotion of RES plants, as well as measures to guarantee the implementation and reclamation of plant sites: firstly, in Article 3, municipalities are given the right to propose a preliminary application for the construction of a RES plant or storage within an area identified as unsuitable; this application, which is approved following a phase of ‘public debate’ by a qualified majority of the municipal council (or councils) whose territory is affected by the plant or storage, is finalized with the signing of an agreement with the Region; in the event that the aforementioned agreement is finalized, ‘the proponent has the option of submitting an application to the competent entities for the implementation of the intervention within the authorization regime envisaged for ordinary areas’, thus opting for the Simplified Authorization Procedure (PAS), or the Single Authorization (AU).

Secondly, for all RES plants and storage facilities and within one hundred and twenty days from the issuance of the authorization for their construction - and in any case before the submission of the notice of commencement of works -, Regional Law no. 20/2024 makes it incumbent on the authorized party to submit to the Regional Department of Industry a guarantee in an amount equal to the total value of the intervention in order to cover any failure to realize the plant or its realization in breach of the authorization issued, as well as to guarantee the decommissioning of the production plant, of the connected works and of the restoration works on the sites concerned. This provision also covers plants in the course of authorization and, with different mechanisms and timeframes, those already authorized for which work has not yet commenced, as well as plants for which work is in progress.

At the end of an overall analysis of the legislation (the destiny of which, in terms of a probable declaration of unconstitutionality, seems already sealed), the opportunities for building RES plants and accumulations appear, therefore, significantly reduced - as well as significantly conditioned by compliance with specific requirements - and it must be noted that the areas defined as ‘suitable’ represent only 1% of the entire regional territory: the law, whose application is foreseen, completely irrationally, even to plants that have already been authorized and whose works have already begun, manifests itself, therefore, as a further (illegitimate) restriction on the spread of renewables, constituting a new obstacle to the achievement of the imposed decarbonization objectives.

1. Plants on industrial areas, former quarries and landfills - Authorization with DILA without the need to obtain other opinions. 

In its decision no. 1922/2024, the Veneto Regional Administrative Court held that, according to Article 22 bis, Legislative Decree no. 199/2021, introduced by Article 47 paragraph 1 letter b) of Decree-Law no. 13/2023, being the installation of ground-mounted photovoltaic plant and the related connection works in areas for industrial, handicraft and commercial use or, again, in landfills or closed and restored landfill lots or lots or portions of quarries not susceptible to further exploitation, an ordinary maintenance activity, is not subject to the acquisition of any permit, authorization or act of consent. In such cases, any rejection measure adopted by the competent authority at the outcome of the PAS, (erroneously) activated by the operator, must be deemed unlawful. This also applies in the event that the aforesaid procedure was activated (in this case appropriately) prior to the entry into force of the aforementioned Article 22 bis, since, by virtue of the principle tempus regit actum, the new provision, in the absence of different transitional provisions, also applies to proceedings already pending at that date.

2. PAS in suitable areas - Related works may also be authorized in PAS where they are located in unsuitable areas.  

With order no. 605/2024, the Regional Administrative Court of Palermo, referring to the provision set forth in paragraph 1 ter, Article 22, Legislative Decree no. 199/2021, noted that the interconnection works of RES plants “may benefit from the simplified authorization rules provided for suitable areas, regardless of their location”. This implies that, even where such interconnection works are located in non-suitable areas, they can in any case - in abstract - be treated as insisting in suitable areas, with the procedural simplifications that comes therefrom, thus leaving it up to the Administration to justify the incompatibility of the works with the area in which they are to be located, having regard to the specific characteristics of the territory and the constraints that insist on it. The Regional Administrative Court comes to these considerations also by virtue of the well-established jurisprudence according to which areas not included in the list of suitable areas “cannot be declared unsuitable for the installation of renewable energy production plants, at the territorial planning stage or within the scope of individual proceedings, simply because they are not included in the list of suitable areas” (see ex multis, Palermo Regional Administrative Court, orders no. 3272 of 8 November 2023, no. 3814 of 20 December 2023, no. 95 of 11 January 2024 and, most recently, no. 87 of 22 February 2024).

In the same order, moreover, the Palermo Regional Administrative Court took the opportunity to give prominence to the periculum deriving from the delay that the competent Administration accumulates in the issuance of the authorization title, having to consider both the fact that the construction of the plant itself is connected to the grid capacity booked by the proponent through the acceptance of the interconnection solution, and the limited duration of the same reservation, equal to only 270 business days from the acceptance of the solution, failing which the reservation would lose its validity and the consequent exposure of the proponent to the risk of the possible exhaustion of the grid capacity.

3. Authorization in suitable areas - The opinion of the Superintendence is not binding. 

In its decision no. 867/2024, the Regional Administrative Court of Sardinia ruled that “if the EIA application concerns a project to be located in suitable areas according to the applicable law, as in the case now under examination, the opinion of the Superintendence is not binding, which is why the competent Ministries must adopt the final act of the procedure on the basis of an autonomous motivation, They cannot merely transpose the opinion expressed by the Superintendence itself, especially when, as in the case now under examination, its opinion is contradicted by the ones expressed by other offices that participated in the preliminary investigation”. In this case, the Court observes, the rejection measure adopted by the MASE is unlawful as it merely recall the negative opinion of the Special Superintendence for the PNRR, without adding anything and without even referring to the favourable opinions that had been expressed by other offices during the preliminary investigation, in particular the Technical VIA-VAS Commission of the same MASE.

4. Authorization in suitable areas - The Municipality cannot introduce new restrictions for the construction of RES plants. 

With ruling no. 3464/2024, the Lombardy Regional Administrative Court found that “the introduction, at a merely local level, of a system of rules aimed at restricting the scope of the areas concretely usable for the establishment of photovoltaic plants, without clear reasons justifying the introduction of such measures in function of the protection of potentially impaired competing interests that are equally worthy of protection as well as in breach of the principle of strict proportionality in relation to the protection requirements pursued, also runs counter to the favour expressed by European Union legislation, in particular Regulation (EU) 2022/2577 of 22. 12.2022, according to which ‘the planning, construction and operation of installations for the production of energy from renewable sources, their connection to the grid, the grid itself, and storage facilities shall be regarded as being in the overriding public interest and in the interest of public health and safety when balancing the legal interests in individual cases’”. Censuring the rules set forth in the municipal building regulations, the Regional Administrative Court specified that if the site chosen for the installation of the photovoltaic plant falls on an area declared suitable by law, the local authority has no chance for assessment as to the installation of the work. The only discretionary margin that remains to the municipal administration is the possibility of introducing a merely building regulation relating to construction aspects, which must, however, move within strict boundaries and be declined according to a principle of strict proportionality in order to remain so and not provide for criteria that prevent the installation of such energy sources.

5. Priority criterion in the EIA - The peremptory nature of the terms of the EIA procedure for non-priority projects does not disappear. 

In judgement no. 9793/2024, the Council of State reaffirmed the peremptory nature of all the terms of the EIA procedure (cf. art. 25, paragraph 7, Legislative Decree 152/2006). Questioning the interpretative scope of art. 8, paragraph 1, of Legislative Decree. 152/2006, as amended by Decree-Law 17/2022, in the part in which it establishes a criterion of priority in the assessment of projects with a significant economic and employment impact or with expiring authorizations, the Council of State, in fact, held that “in any case, even regardless of the methods used by the administration to give concrete expression to the legislative criterion of priority the Ministry should have adopted, under the legislation in force, organizational measures such as to allow the examination of priority projects, without prejudice to the observance of the deadlines for the conclusion of proceedings relating to non-priority projects inasmuch as they are not derogated from by any provision of law”. The criterion of priority thus assumes, therefore, mere internal relevance for the purposes of an orderly and effective management of the authorization procedures by the bodies deputed thereto, “but it is not such as to assume, at the same time, a derogatory scope to the legal regulation of the time limit for the conclusion of the proceedings”.

6. Tempus regit actum - Article 22 bis also applies to proceedings pending on the date of its entry into force. 

In its decision no. 790/2024, the Sardinian Regional Administrative Court upheld the appeal against the refusal of a single authorisation pursuant to Article 12 of Legislative Decree no. 387 of 2003 concerning the construction of a photovoltaic plant with a capacity of 104.076 MW in an industrial area, on the basis of the tempus regit actum principle, since, during the authorization procedure, Article 47 of L.D. no. 13 of 24.2.2023 (conv. L. no. 41 of 23.4.2023) entered into force, introducing art. 22 bis into the L.D. no. 199 of 2021, entitled ‘Simplified procedures for the installation of photovoltaic plants’.

In the opinion of the Court: “The regional refusal, in view of the new legislation, is not lawful”, since “the project in question is no longer subject to the single authorization regime” with the consequence that the procedure for its issue should have been closed since the activity can be qualified as ordinary maintenance not subject to authorization and, therefore, “free building activity” by virtue of the entry into force of Article 22 bis.

7. State EIAs - The priority criterion for the treatment of certain projects does not invalidate the peremptory nature of the deadlines for the conclusion of the proceedings for ‘non-priority’ projects.

With decision no. 830/2024, the Regional Administrative Court of Sardinia declared the illegitimacy of the MASE's silence with respect to the obligation to proceed in relation to the adoption of the Environmental Impact Assessment (EIA) measure within the terms provided for by Article 23 et seq. of Legislative Decree no. 152 of 2006 on the basis of the assumption that “the introduction of a priority criterion in the processing of applications based on the greater power of the plant (art. 8, para. 1, legislative decree no. 152/2006) cannot in itself legitimize the failure to comply with the deadline for the conclusion of the proceeding (art. 25, para. 7, legislative decree no. 152/2006) for other projects, also in view of the circumstance that they are aimed at satisfying interests attributable to the operation of the business”.

8. Cost-effectiveness of administrative action - Sardinian Moratorium - The operator may ask the municipal administration to correctly qualify its application in the light of the legislation that has come into force.

In its decision No. 844/2024, the Sardinian Regional Administrative Tribunal observes that, following the entry into force of Law No. 5/2024 (the so-called Sardinian Moratorium), the operator may ask the municipal administration to correctly classify its application in the light of the legislation that has come into force, providing the necessary documentation according to the clarifications provided by the regional law itself on the characteristics of the so-called ‘agri-voltaic’ projects exempt from the moratorium.

The different opinion, expressed by the administration, that the applicant could have made a new application in accordance with the new law, thus giving rise to a new procedure, is in contrary to concentration, economy and efficiency principle of administrative action requiring that when a procedural-communication channel is already open between the administration and private individuals, and a different and relevant piece of legislation comes into force, the same channel should be used to specify - in the light of the change that has taken place - the contents and characteristics for the recognition of the authorization / right that has already been requested.

9. In the case of areas to be acquired through an expropriation procedure, the non-availability of the areas is not an obstacle to the establishment of the tacit authorization.

In judgment No. 847/2024, the Sardinian Regional Administrative Court deemed the authorization to construct the repowering works for a wind farm consisting of 27 wind turbines with a total capacity of 121.5 MW to have been tacitly obtained following the expiry of the 60-day period provided for by Legislative Decree No. 50/2022 from the submission of the application.

On this point, the competent Authority objected to the failure to demonstrate the availability of the areas by the applicant, pointing out that the expropriation procedure could not be considered tacitly concluded.

This assertion, however, according to the Court, is not compliant with the applicable law, given that Article 12, paragraph 4 bis of Legislative Decree No. 387/2003 provides that for plants other than those indicated in the first paragraph (which does not include wind farms) the operator “[...] when submitting the application for authorisation referred to in paragraph 3, may request the declaration of public utility and the attachment of the pre-ordained expropriation of the areas affected by the construction of the plant and related interconnection works”.

It follows that the competent Authority could not have objected to the non-availability of the areas as an obstacle to the recognition of the tacit formation of the authorization, given that their actual availability will depend on the performance of the expropriation procedures following the conclusion of the authorization procedure. 

Nor can the tacit formation of the title be prevented by the Moratorium provided for by Regional Law No 5/2024, given that that law entered into force on 4 July 2024, therefore, long after the formation of the tacit authorization, on which it could not produce any preclusive effect.

10. The unsuitability of the areas due to the lack of the prerequisites for the application of one of the areas indicated in paragraph 8, Article 20, of Legislative Decree 199/2021, does not prevent the qualification of the areas as suitable due to the existence of the prerequisites relating to a different case under the same paragraph.

In this case, dealt with by the Regional Administrative Court of Tuscany with decision no. 1359/2024, the competent Authority had denied the authorization for the construction of a ground mounted photovoltaic plant, although it fell within a suitable area pursuant to letter c-ter, paragraph 8, of Article 20 of Legislative Decree 199/2021, as it did not fall within the suitable areas referred to in letter c-quater, since the area falls within the perimeter of a protected zone pursuant to Article 12, paragraph 1 of Legislative Decree 42/2004.

For the Regional Administrative Court of Tuscany: “The above provisions must be interpreted, as stated by recent jurisprudence (…), in the sense that they provide for two distinct hypotheses, cumulative among themselves, of ex lege suitability of territorial areas for the construction of photovoltaic plants. In other words, the ascertained existence of the prerequisites of one of the two provisions contained in letters c-ter and c-quater means that the area has to be deemed suitable. More specifically, with reference to the present case, the possible ineffectiveness of letter c-quater does not exclude that the plant is authorizable under letter c-ter, since the second of the two provisions (quater) adds a new hypothesis of legal eligibility, textually preserving the operability of the first provision (ter)’.

Objectives and Guidelines

The Unified Code addresses the regulatory fragmentation that has often hindered the development of renewable energy in Italy. Its main goals include:

• Reducing bureaucratic complexity;

• Ensuring greater operational certainty for investors and industry stakeholders;

• Supporting clearer and harmonized territorial planning;

• Promoting efficient land use through innovative tools such as “acceleration zones.”

Key Innovations of the Measure

1. Three Differentiated Administrative Regimes

To streamline authorization processes, the decree establishes three administrative regimes:

• Free Activity: Applies to minor interventions that do not interfere with protected properties or public works. Compliance with basic technical and environmental conditions is sufficient. For interventions on non-urbanized land, a financial guarantee for site restoration is required.

• Simplified Enabling Procedure (PAS): Designed for medium-complexity projects, this procedure involves submitting simplified technical documentation. It applies to interventions that do not require environmental assessments but still need specific monitoring. The proposer may request the publication of the PAS in the relevant Region's Official Bulletin.

• Unified Authorization: Required for complex and large-scale interventions. The regional authority is responsible for plants up to 300 MW, while the national Ministry of Environment oversees those exceeding this threshold. Regions may discretionarily activate the PAUR procedure under Article 27 bis of Legislative Decree No. 152/2006 for regional EIA (Environmental Impact Assessments), ensuring the final Unified Authorization also includes the EIA ruling. The Unified Authorization process now also encompasses any EIA Screening ruling, regardless of whether the PAUR process is initiated.

Publication of the Unified Authorization ruling on the relevant authority's website is mandatory.

New thresholds for EIA Screening procedures are introduced:

• The new thresholds of (>) 30 MW, above which national EIA (Environmental Impact Assessment) Screening applies, and (≥) 15 MW, above which regional EIA Screening applies, for ground-mounted plants located in areas designated for industrial, artisanal, and commercial use, as well as in landfills or closed and restored landfill lots or in quarries or quarry lots or portions of quarries that cannot be further exploited;

• The new threshold of (>) 25 MW, above which national EIA Screening applies for ground-mounted plants in suitable areas (the threshold remains at 10 MW for ground-mounted plants in areas not included among the suitable ones);

• The new threshold of (≥) 12 MW, above which regional EIA Screening applies for photovoltaic and agro-voltaic plants in agricultural areas that are compatible and allow integration with agricultural activity (to understand the meaning of such compatibility and integration);

• The new threshold of (≥) 15 MW, above which regional EIA Screening applies for rooftop plants.

2. Acceleration Zones

The decree introduces “acceleration zones,” geographical areas designated to expedite the plant of renewable energy systems. These zones will be mapped by the Energy Services Manager (GSE) by May 2025, with final regional plans expected by February 2026. Priority areas include:

• Artificial and built surfaces;

• Industrial areas and waste disposal sites;

• Artificial water basins and non-productive agricultural land.

This approach aims to avoid conflicts with other economic activities or landscape protection while promoting rational land use.

3. Land Availability

For free construction activities, the proposing entity must acquire the availability of the area before starting interventions, regardless of their type. Land availability for connection works is not required.

For PAS-regulated interventions, the proposing entity must also secure land availability at the time of the authorization request. Expropriation procedures are now allowed for network works.

Unified Authorization interventions can include expropriation for plant areas, except for new photovoltaic, solar thermal, biogas, and biomethane plants.

4. Start and Completion Deadlines

Free construction activities do not have specific start/completion deadlines.

PAS-regulated interventions must start within one year of PAS approval and conclude within three years of commencement.

Unified Authorization interventions have deadlines set by the authorization ruling, with a total minimum duration of four years. Authorization rulings must also specify the operational start date of the plant. Extensions are granted only for force majeure events, a narrower criterion compared to the current rules allowing extensions for events beyond the proponent’s control.

5. Codification of the Ban on Artificial Fragmentation

Regions are tasked with defining rules to combat artificial fragmentation of authorization requests, where formally different entities attempt to access less burdensome authorization procedures but share a common “center of interest.”

6. Strengthening the Sanctioning Framework

To ensure compliance, the decree introduces severe penalties for authorization-related violations, reaching up to Euro 150,000. Site restoration is always mandated.

Next Steps

According to the approved text, the decree will take effect on 30 December 2024. Its success will largely depend on the ability of regional and local authorities to swiftly adapt to the new provisions. Strong coordination between central and peripheral levels will be crucial to translating promised simplifications into tangible benefits for citizens and businesses.

Regions have 180 days to align with the provisions and principles of the decree. Until then, the previous regulations will continue to apply.

Roma, 8 Novembre 2024

1. Introduction

The taxation for registration tax purposes of deeds creating rights of superficies on agricultural land is an issue of great relevance and interest for the renewable energy sector, since it is a contractual arrangement widely used in the context of the construction of plants for production of electricity from wind and photovoltaic sources. Such contractual agreements indeed allow producers of energy from renewable (specifically wind or photovoltaic) sources to secure the availability of the agricultural areas and land on which such plants are generally installed (and at the same time the “bankability” of the projects themselves), without acquiring full ownership of such land.

For registration tax purposes, a deed creating a right of superficies falls within the “deeds subject to registration within a fixed deadline”, in relation to which Article 1, paragraph 1, of the Tariff, Part One, attached as Annex A to Presidential Decree No. 131/1986 (“T.U.R.”) provides as follows:

• in the first sentence: “deeds transferring title to real estate in general for valuable consideration and deeds transferring or creating in rem rights of use, including pure and simple waiver thereof, measures of expropriation in the public interest and compulsory transfers” are subject to proportional registration tax determined at the rate of 9%;
• in the third sentence: “if transfer relates to agricultural land and its appurtenances in favour of persons other than farmers and professional agricultural entrepreneurs, registered in the relevant social security and welfare management system", the relevant deeds are subject to proportional registration tax determined at the rate of 15%.

In respect of deeds creating rights of superficies on agricultural land in favour of persons other than farmers and professional agricultural entrepreneurs, Italian tax authorities have historically stated their subjection to proportional registration tax at the rate of 15%¹, deeming such case comparable to the concept of “transfer” referred to in the third sentence of Article 1, paragraph 1, cited above².

The approach expressed on this point by the tax administration had already been disregarded by the case law of the Italian Supreme Court, based on considerations aimed at highlighting the impossibility of endorsing, from a legal perspective, the assimilation proposed by the tax authorities.

More specifically, by decision No. 3461/2021, the Italian Supreme Court, ruling on the registration tax applying to a deed creating rights of superficies on agricultural land for the construction of a photovoltaic plant, stated that  “From a plain reading of the provision [third sentence of Article 1 of the Tariff, Drafter’s note] it emerges  that the same applies to the transfer and not to the “creation” of an in rem right of use”, outlining the impossibility of assimilating the two cases, since  “the creation of a right of superficies on land by an assignor/creator is not regulated by the provisions applying to transfer deeds”, precisely because “a right of superficies is ‘created’, and not ‘transferred’".

Based on the above considerations, the Italian Supreme Court decided to endorse the approach previously expressed by judgment No. 16495/ 2003³, issued in a case concerning the creation of easement rights, considering it “similar to the one under consideration for tax purposes” [creation of right of superficies, Drafter’s note]”, deeming also the case of creation of the right of superficies under consideration falling within the scope of the provision set out in the first sentence of paragraph 1 of Article 1 of the Tariff, Part One, with consequent application of proportional registration tax at the rate of 9%.

2. The Reply to application for a ruling No. 365/2023.

Notwithstanding the clear interpretative/operational criterion outlined by the Italian Supreme Court, with respect to the right of superficies the Tax Authorities - unlike in relation to the right of easement - maintained the “assimilation” thesis, reaffirming their position in their Reply to application for a ruling No. 365/2023.

In such document, with respect to the legal principle stated by the Italian Supreme Court by decision No. 3461/2021, cit.  – referred to by the  applying Notary in support of its interpretation – the Revenue Agency stated that the  grounds expressed in such decision were not deemed prejudicial to its view  since “although concerning a dispute regarding the taxation of a deed of creation of the right of superficies, the Italian Supreme Court expressly recalls previous rulings on the right of easement as well as the concept according to which “it does not entail the transfer of rights or faculties of the owner of the servient estate”, which, as pointed out, is peculiar to the right of easement as defined by Articles 1027 et seq. of the Italian Civil Code and not to other in rem rights of use”.

Based on the above considerations, the Agency therefore concluded that “the taxation principles set out in the aforementioned Circular No. 18/E of 2013, for registration tax purposes, are still deemed applicable. Therefore, the deed of creation of the right of superficies in respect of the agricultural land at issue is subject to registration tax at the rate of 15%, in addition to mortgage and cadastral taxes at the fixed rate of EUR 50 each”.

3. Decision of the Italian Supreme Court No. 27293/2024.

In its very recent decision No. 27293/2024, the Italian Supreme Court ruled again on the taxation for registration tax purposes of deeds creating rights of superficies on agricultural land⁴, confirming the application of the rate provided for by the first sentence of Article 1, paragraph 1, of the Tariff, Part One, attached as Annex A to Presidential Decree No. 131/1986 (namely, 8% pursuant to the text applicable ratione temporis to the case at issue and 9% according to the text currently in force).

Consistently with the position previously held, the Italian Supreme Court - recalling that “In both scenarios contemplated by Article 952 of the Italian Civil Code, there is a separation between the legal ownership of the land and that of the building (to be constructed or already existing) [which, Drafter’s note ) does not entail, however, a splitting of the legal ownership of the land, which [...] remains with the grantor” - reiterated that “by reason of the intrinsically temporary nature of the right, surface tenure must be considered a right ontologically different from fee simple interest” and the consequent need, for tax treatment purposes, to keep the transfer deeds distinct from those creating in rem rights of use, considering also that “when the legislator wanted to tax also the deeds creating said rights, it made express provisions in such regard⁵”.

In confirming its position, the Italian Supreme Court expressly stated that the guidelines provided by the tax authorities⁶, traditionally invoked by them in support of the payment notices issued in relation to such particular case, are not binding.

It appears significant that the Italian Supreme Court not only expressly referred to and confirmed the view already laid down in decision No. 3461/2021, but de facto considered it as well established.

Indeed, following the appeal lodged by the Attorney General's Office, the Deputy Counsellor proposed an accelerated settlement pursuant to Article 380-bis of the Italian Code of Civil Procedure, due to the manifest unfoundedness of the grounds of complaint, noting that "The word transfer contained in Article 1 of the Tariff attached to Presidential Decree No. 131 of 1986 was used by the lawmaker to indicate all those deeds providing for the transfer from one party to another of the ownership of real estate or the holding  of in rem rights of use in real estate and cannot be referred to deeds creating in rem rights of use such as an easement, which does not entail the transfer of rights or faculties of the owner of the servient estate but the limitation of the latter's right of ownership to the benefit of a given dominant estate)". 

The decision in question, therefore, further contradicts the position reiterated in the Reply to application for a ruling No. 365/2023 cited above, whereby the Tax Administration had reaffirmed the application of the 15% rate to deeds creating a right of superficies on agricultural land, notwithstanding the fact that the notary public drawing up the deed had made express reference to the principle established by decision No. 3461/2021 cited above.

Considering the full compliance of the decision with the proposal of the Deputy Counsellor, the losing Public Treasury was, inter alia, ordered not only to pay the “increased” litigation costs, but also to pay the further sums provided for by Article 96, paragraphs 3 and 4 of the Italian Code of Criminal Procedure, an element that may lead the Tax Administration to consider ceasing recourse to litigation, as occurred with respect to deeds of easement ⁷.
 

¹ Resolution No. 92/E/2000, Circulars Nos. 18/E/2013 and 36/E/2013. According to the Agency’s view, although  the third sentence of Article 1 cit., as is worded, limits the application of the  15% rate to deeds involving the “transfer” of agricultural land, lawmakers (allegedly) intended to assimilate the concept of “transfer” to the concept of “deed of transfer” or “deed transferring or creating in rem rights of use in real estate, so that the term “transfer” should be deemed to also cover the “deeds creating in rem rights of use in real estate”  expressly mentioned in the first sentence of paragraph 1.

² Conflicting with such view was the more recent Resolution No. 4/E of 15 January 2021, which, endorsing the view taken by the Italian Supreme Court of the point, stated that, for the purposes of the registration tax, a  deed creating easement rights on agricultural land for persons other than farmers and agricultural entrepreneurs should fall within the scope of the general provision referred to in the first sentence of Article 1, paragraph 1, of the Tariff, Part One, declaring the indications contained in the former circulars de facto  superseded. (Cass. judgment No. 16495/2003, conf. Cass. judgments Nos. 22198/2019, 22199/2019, 22200/2019 e 22201/2019, Cass. decisions 6671/2020, 6677/2020 and 22118/2020).

³ According to which "The term “transfer” contained in Presidential Decree No. 131 of 1986, Article 1, of the attached tariff was used by lawmakers to indicate all those deeds that involve the transfer of title to real estate or of in rem rights of use in real estate from one person to another and cannot be referred to deeds  creating in rem rights of use such as right of easement, which does not involve the transfer or rights or faculties of the owner of the servient estate but the limitation of its ownership right in favour of a certain estate (dominant estate)"

⁴ In particular, the case ruled by the Italian Supreme Court concerned a deed creating a right of superficies on agricultural land for the construction of a photovoltaic plant.

⁵ Making reference, by way of example, to Article 9, paragraph 5 of Presidential Decree 917/1986. 

⁶ In particular, by Circular No. 36/E/2013 invoked by the applicant Authority in support of its appeal, in respect of which the Italian Supreme Court recalled “that the circulars whereby the Revenue Agency provides an interpretation of a tax provision, even if containing instructions to hierarchically subordinate departments, express exclusively a non-binding opinion, not only for the departments to which they are addressed, but also for taxpayers, for the same authority that issued them and for the court; therefore, the so-called ministerial interpretation of tax provisions, whether contained in circulars or resolutions, does not represent a source of law, nor is it subject to the review of legitimacy exercised by the Supreme Court (pursuant to Articles 111 of the Italian Constitution and 360 of the Italian Code of Civil Procedure), since they are not the expression of regulatory activity, but rather an internal activity of the public administration itself, intended to exercise a directive function with respect to the dependent departments, but having no effect on the tax relationship (Cass. en banc No. 23031 of 2007; Cass. No. 35098/2022; Cass. No. 18618 /2019; Cass. No. 10195 of 2016)”.

⁷  See above, Resolution No. 4/E of 15 January 2021.

Thanks to the Energy Release mechanism, Energy Intensive Companies will have the right to request from the Gestore dei Servizi Energetici - G.S.E. S.p.A. (“GSE”) an advance 50% of the volume of energy and related guarantees of origin (“GO”) to be produced by plants from additional renewable sources (“Plants”) against payment to the GSE of a fixed price for a duration of three years. 

These favourable conditions shall be applied against the commitment to generate (or, as better specified below, to purchase from third parties) electricity produced by the aforesaid Plants. The volume advanced by the GSE will be returned - together with the relevant GOs - by the Energy Intensive Companies once the relevant Plant will be entered into operation, within a set term, during the 20 (twenty) years following the entry into operation. In addition to the above, it should be noted that public administrations, when granting public areas in their disposal, should prefer to allocate them to projects of RES production facilities to be built to meet the energy needs of energy-intensive enterprises.

In particular, Article 1 of the aforementioned Energy Decree provides that:

• the advance is governed by a two-way contract for difference with respect to a price fixed in advance by the GSE itself (“Advance Contract”); 

• return takes place over twenty years under a further two-way contract for difference on the basis of the same price set by the GSE (“Return Contract”).

As an alternative to the construction of the Plants by the Energy Intensive Companies, the same may undertake to have the Plants built by third parties. In this case, such third parties and the Energy Intensive Company shall sign - even indirectly - purchase agreements for the renewable energy produced by the Plants (Long Term Corporate PPA or On Site PPA) (“PPA”), for a total volume equal to at least twice the amount to be returned. In this second case, the Energy Intensive Company also undertakes on behalf of the third party producers towards the GSE for the future restitution of the electricity advanced.

New generation capacity can be realized alternatively through:

• installation of new photovoltaic, wind and hydroelectric plants with a minimum rated power of 200 kW each;

• photovoltaic, wind power and hydroelectric plants that are being upgraded or refurbished, resulting in an increase in power of at least 200 kW.

Modalities and Criteria for Access to the Energy Release Mechanism

Within sixty days from the entry into force of the DM Energy Release, the MASE will approve the operating rules proposed by the GSE (“Operating Rules”) and within fifteen days from the date of entry into force of the approval decree, the GSE will publish the notice for the allocation of the electricity in its availabilty. 

Pursuant to Art. 3(1) of the DM Energy Release, such notice must contain at least the following information:

• volume of energy available to the GSE;

• transfer price, determined by taking into account the efficient unit cost of producing renewable energy from plants of efficient scale using competitive technologies (“Transfer Price”);

• criteria for determining the new generation capacity from renewable sources to be realized;

• outline of the Advance and Return Contract and the related guarantees.

Within sixty days from the date of opening of the notice for the allocation, Energy Intensive Companies must submit an expression of interest in participating in the procedure for the allocation of the electricity available to the GSE.

Such expression of interest must meet the following requirements:

• the volume of energy requested in advance may not exceed the average annual consumption relevant for inclusion in the energy-intensive list;

• The Energy Intensive Company, as customer, undertakes to

  • to build or have built by a third party a Plant, which shall come into operation within 40 (forty) months from the conclusion of the Advances Contract, except in the event of force majeure or delays in the authorisation procedures not attributable to the company;

  • sign, or have the third party sign, the Repayment Agreement within 40 months of the signature of the Advances Agreement;

  • provide an appropriate guarantee within the terms and in the manner defined by the GSE in the Operating Rules. 

The Energy Intensive Company shall also have to provide an appropriate security to confirm its willingness to take part in the allocation procedure; this security shall be returned upon signature of the Advance Contract or upon declaration of waiver, if any.

Preliminary conclusions

Excluding in this context a full description and analysis of the complexities emerging from the DM Energy Release and of the content of the Advance Contract and of the Return Contract, their nature and relationship with the PPA and, perhaps, with the virtual PPA, there are certainly several points to be clarified, which can hopefully be defined in the Operating Rules by the GSE, in order to fully understand the access modalities as well as the functioning of the Energy Release mechanism. 

The Operating Rules may in fact be useful in order to identify, the reference price for the operation of the Energy Release mechanism, the amount of the deposit to be paid in order to participate in the call for tenders, the system of guarantees required of Energy Intensive Company for the signing of the Advance Contract and the Restitution Contract, the Transfer Price - which shall be determined on the basis of the “average efficient cost of producing renewable energy from plants of efficient scale using competitive mature technologies” - and the relationship between access to the incentive and the subject matter of the supply contract entered into with the third party producer of additional electricity if the same is not produced directly by the Energy Intensive Company.

Written by Piero Viganò, Ernesto Rossi Scarpa Gregorj and Valentina Castelli.  

Pending the approval of the regional law identifying suitable areas pursuant to Article 20, paragraph 4, of Legislative Decree 8 November 2021, no. 199, as well as of the approval of the Regional Development Programme (PRS) and the Regional Landscape Plan (PPR), and, in any case, for a period not exceeding 18 months from its entry into force, the regulation subjects the entire regional territory to measures to safeguard the landscape, territory and environment, providing for the prohibition of the construction of new plants for the production and storage of electricity from renewable sources that directly affect the occupation of land.

In particular, the following areas are subject to safeguard measures involving the prohibition of the construction of new plants for the production and storage of electrical energy from renewable sources:

a) homogeneous urban areas pursuant to Article 3 of Decree No. 2266/U of 20 December 1983[1], without prejudice to the provisions of Paragraph 3 of the Act;

b) protected natural areas established pursuant to Law No 394 of 6 December 1991, with particular reference to integral and general oriented reserve areas as well as equivalent areas established by regional legislation;

c) wetlands of international importance recognized and included in the list of the Convention on Wetlands of International Importance, with particular reference to waterfowl habitats, signed in Ramsar on 2 February 1971, and implemented by Presidential Decree no. 448 of 13 March 1976;

d) wetlands within Sites of Community Interest (SCI) or Special Protection Areas (SPAs) and wetlands within nature reserves and protection oases established at national and regional level;

e) areas included in the Natura 2000 Network in accordance with Directive 92/43/EEC of 21 May 1992;

f) breeding, feeding and transit areas of protected fauna species or areas where the presence of animal and plant species subject to protection under international conventions and Directive No. 92/43/EEC of 1992 is ascertained;

g) agricultural areas affected by quality agricultural-food productions, such as organic productions, PDO, PGI, TSG, DOC, DOCG, traditional productions, or areas of particular value with respect to the landscape-cultural context;

h) areas characterized by situations of instability or hydrogeological risk that are delimited in the Hydrogeological Structure Plans (PAI);

i) areas that are less than 7 kilometers from cultural heritage, or 1,500 meters for minor islands;

j) the areas referred to in Article 142, paragraph 1, of Legislative Decree No. 42 of 2004, letters a, b, c, d (within the limits of the part exceeding 1,200 meters above sea level), f, g, h (limited to areas encumbered by civic uses) and m;

k) the areas identified pursuant to Article 143, paragraph 1, letter d), of Legislative Decree no. 42 of 2004[2];

(l) areas that are less than 7 kilometers away, as the crow flies, or 1,500 metres for minor islands, from plants for the production and storage of electricity from renewable sources that have been built or for which an application has been filed for the start of the relevant authorization procedure at the date of entry into force of the law.

The following are excluded from the application of the safeguard measures:

1. plants for the production and storage of electricity[3] from renewable sources that do not involve land consumption and, limited to homogeneous zones H, provided that they are intended for self-consumption or for the enhancement of the compendium in terms of environmental sustainability;

2. ordinary, extraordinary maintenance or revamping of plants for the production and storage of electricity from renewable sources;

3. plants for the production and storage of electricity from renewable sources aimed at self-consumption and plants located in energy communities;

4. plants located in the free areas of plots already urbanized and built on at the entry into force of the law on the basis of an implementation plan, falling within homogeneous urbanistic zones D and G;

5. plants for the production and storage of electrical energy from renewable sources envisaged within projects aimed at sustainable public transport;

6. plants for the production and storage of electricity from renewable sources integrated within projects for the realization of public works;

7. advanced agri-voltaic plants, with elevated construction solutions with a maximum size of 10 Mwp serving farms run by owners with the status of direct cultivator (CD) or professional agricultural entrepreneur (IAP) operating as of 31 December 2018 and with operational headquarters in the territory of the Sardinia Region. 

With paragraph 2 of Article 3, the law provides for the application of the safeguard measures also to the 'ongoing' authorization procedures of plants for the production and storage of electricity from renewable sources.

Although the approved and published text makes no reference to plants already authorized whose construction has not yet begun, the President of the Region, Alessandra Todde, point out that the law “is effective in blocking all initiatives for which work has not yet begun prior to its entry into force”. Therefore, despite the letter of the rule, the construction of plants that have already been authorized and whose work has not yet begun should also be considered blocked, with serious damage to the legitimate expectations of operators.

The law immediately showed clear profiles of unconstitutionality. 

It is yesterday's news that the Council of Ministers decided to challenge it before the Constitutional Court for exceeding the Region's own competences according to the Statute, for contrasting with State and European legislation and for violating Articles 3, 41 and 117 of the Constitution. The Council of Ministers has also asked the Constitutional Court to apply immediately and as a precautionary measure the suspension of Article 3, the core of the provision.

On this point, it should be recalled that the Regions were not permitted to proceed with the identification of suitable areas prior to the issuance of the Ministerial Decree referred to in Article 20, paragraph 1, of Legislative Decree No. 199/2021 ("Ministerial Decree on Suitable Areas", most recently published in the Official Gazette on July 2, 2024), nor are they permitted to provide for moratoria or suspensions of the terms of the authorization procedures, as provided for by paragraph 6 of the aforesaid Article 20. Moreover, the Regions do not have the power to subject the construction of production or storage plants to express limitations on specific areas, implying, in fact, their concrete unusability for significant expanses of territory, in violation of the reservation of administrative procedures and the relative preliminary investigation aimed at balancing the public interests involved and guaranteeing their proper development (see ex multis Constitutional Court, judgment no. 77 of 2022), nor can they autonomously provide for the identification of criteria for the proper inclusion in the landscape of plants fuelled by alternative energy sources (see Constitutional Court, judgment no. 168 of 2010) or impose absolute preclusions that prevent a priori any concrete assessment at the time of authorization (see Constitutional Court, judgment no. 106 of 2020).

The law, in other terms, violates Article 117 of the Constitution on the subject of concurrent legislation on 'production, transport and national distribution of energy', Article 3 of the Constitution, regulating situations that are substantially identical in an unjustifiably different manner from the national provisions, and Article 41 of the Constitution on freedom of initiative, in addition to being clearly in conflict with the principle of maximum dissemination of renewable energy sources, as it hinders the achievement of ambitious national and European decarbonization objectives.

Despite the fact that, therefore, in all likelihood the law will be censured by the Constitutional Court - as has already happened in the past with similar provisions (see the Lazio and Abruzzo Moratorium declared unconstitutional in judgments n. 221/2022 and 27/2023, respectively) - there is a real risk that any authorization process that may be initiated for the realization of a project in the Region will be affected by the Moratorium (except for the cases referred to in paragraph 3 of Article 3 above) pending the Constitutional Court's decision.

[1] Homogeneous zones includes: (a) the historic-artistic center or those of particular environmental value (zones A); (b) the totally or partially built-up parts of the territory other than zones A (zones B); (c) the parts of the territory destined for new residential complexes, which are undeveloped or in which the pre-existing construction does not reach the limits of utilized surface area required for zones B (zones C); (d) the parts of the territory destined for new settlements for industrial, craft, commercial, conservation, processing or marketing facilities for agricultural and/or fishing products (zones D); e) the parts of the territory destined for agricultural use and those with buildings, equipment and installations connected to the agro-pastoral and fishing sectors and to the valorization of their products (zones E); the parts of the territory of tourist interest (zones F); the parts of the territory destined for public and private buildings, equipment and installations, reserved for services of general interest (zones G); the parts of the territory that cannot be classified according to the criteria defined above and that have a particular speleological, archaeological or landscape value or are of particular interest to the community, such as the coastal strip, the strip around urban agglomerations, the cemetery buffer zone, the strip along provincial and municipal roads (zones H).

[2] In particular: the coastal strip, systems of bays and promontories, cliffs and small islands; dune fields and beach systems, rocky and ridge areas and areas higher than 900 meters above sea level; caves and caverns; natural monuments pursuant to Regional Law No. 31 of 7 June 1989; wetlands, natural lakes and artificial reservoirs and contiguous territories included in a strip 300 meters deep from the shoreline, also for elevated territories on lakes; rivers, streams and watercourses and their banks or embankment feet, for a strip of 150 meters each, and river systems, riparian, resurgences and waterfalls, even if temporary; areas of further naturalistic interest including priority species and habitats, pursuant to Directive no. 43/92/EEC of 1992; areas that are less than 2 kilometers as the crow flies from monumental trees; areas characterized by buildings and artefacts of historical and cultural value, including the protection strip; areas characterized by historical settlements.

[3] On this point, it should be noted that the Region has no competence in authorizing stand-alone Bess plants; this, in fact, belongs to the MASE. The rule therefore, insofar as it refers to 'storage plants from renewable sources', can at most refer to storage plants operating in combination with plants from renewable sources. Stand-alone plants must therefore be exempt from the effects of the Moratorium.

Written by Giovanni De Luca, Piero Viganò and Paola Putignano.

The Ministerial Decree completes the framework of rules for the revision of the guidelines on subsidies for energy users introduced by Decree-Law No. 131/2023 in line with the guidelines on State aid set out in the European Commission’s Communication 2022/C 80/01 of 18 February 2022 on “Guidelines on State aid for climate, environment and energy 2022”.

The reform of the subsidy scheme for energy-intensive companies

For the purposes of the article, the Decree-Law No. 131/2023 provides that in order to have access to favorable conditions in the application of the contributions to cover the general charges pertaining to the electricity system referred to in Article 3, paragraph 11 of Legislative Decree No. 79 of 16 March 1999 concerning the support of renewable energies (“Facilitation”) - in addition to the obligation to carry out an energy audit, energy intensive companies are required to adopt, alternatively, one of the following measures:

• implement the obligations set out in the energy audit if the amortization time of the investments required for this purpose does not exceed three years and the related cost does not exceed the amount of the Facilitation received;

  • demonstrate that they cover their needs from “non-carbon emitting sources” by at least 30%;

  • invest at least 50% of the amount of the Facilitation in projects that result in substantial reductions in greenhouse gas emissions.

The clarifications and provisions of the Ministerial Decree: 

(i) implementation of the actions foreseen in the energy audits

With specific reference to the measures envisaged in the energy diagnosis report (“Report”), Article 4 of the Ministerial Decree clarified that:

• the energy intensive company shall identify the interventions it intends to implement for each year of eligibility for the Facilitation, provided that these interventions have the following characteristics

  • a simple turnaround time of no more than three years;

  • a total cost of the investment (including any additional operating cost for carrying out the intervention) not exceeding the amount of the Facilitation received in the relevant year;

• in the year of reference of the Facilitation, the energy intensive company shall make investments corresponding to at least one third of the value of the above-mentioned interventions;

• the interventions shall in any case be completed within the second year following the year of the facilitation.

Article 4 of the Ministerial Decree clarified that to comply with these obligations, interventions provided for in a valid Report and implemented on or after 1 January 2024 are relevant.

The interpretation of the above provisions still appear ambiguous, and it therefore necessary to wait for the resolution with which ARERA will have to establish the methods and terms by which energy intensive companies will have to communicate their choice of interventions contained in the Report with which to fulfil their obligations.

(ii) Energy supply for at least 30 per cent of requirements from non-carbon emitting sources

With reference to the alternative of supplying energy from non-carbon emitting sources for at least 30 per cent of the energy-intensive enterprise’s needs, the DM clarifies that this obligation can be fulfilled in three ways (or a combination thereof):

• individual on-site or remote self-consumption with use of the public grid or with use of direct private cable;

• purchase of electricity through forward contracts concluded with producers of electricity from renewable sources;

• directly through the acquisition and cancellation of guarantees of origin for the corresponding value (one guarantee of origin corresponds to 1 MWh).

Some differences and coordination requirements with respect to the MASE Ministerial Decree of 23 July 2024 (“DM Energy Release”) should be taken into account when implementing the relevant provisions.

(iii) Investment of at least 50% of the amount of the Facilitation in projects leading to substantial reductions in greenhouse gas emissions 

Finally, in relation to the last of the alternatives available to energy-intensive companies, the Ministerial Decree clarified that “projects that result in substantial reductions in greenhouse gas emissions below the lowest of the following values” are eligible to meet the obligation to invest at least 50 per cent of the amount of the Facilitation:

• 90% of the applicable ETS free allocation benchmark;

• the 10% average emissions of the best installations listed in EU Regulation 2021/447 for the relevant product. 

Controls and sanctions

Finally, the Ministerial Decree assigned to ENEA, ISPRA and GSE the powers of control over the fulfilment of the above obligations according to procedures to be defined by the same entities.

In particular, ENEA will carry out controls each year on a sample of three per cent of the energy-intensive companies that have chosen to fulfil their obligations through the implementation of the measures envisaged in their energy diagnosis.

In the event of an ascertained breach, the entire facilities received during the period of the breach shall be returned to CSEA with penalties determined in accordance with Article 8 of the Ministerial Decree.

Written by Piero Viganò and Ernesto Rossi Scarpa Gregorj.

With this note, we intend to summarize and comment the main provisions of article 5 of the Law Decree no. 63 of 15 May 2024, published in Official Gazette no. 112 of 15 May 2024 (“Agricultural Law Decree”), which came into force on  16 May.  Article 5 introduced some restrictions on the installation of ground-mounted photovoltaic plants on agricultural areas, amending the Article 20 of Legislative Decree 199/2021 by introducing a new comma 1-bis which provides that the installation of ground-mounted PV plants in agricultural areas is limited to “suitable areas”.

On 12 July 2024, the Law Decree has been converted into Law no. 101 and published in Official Gazette no. 163 of 13 July 2024.

Exceptions to the ban

Firstly, the installation of photovoltaic plants with ground-mounted modules in areas classified as agricultural is still permitted:

a) if limited to repowering and revamping pre-existing PV plants that do not entail an increase of the area occupied (letter a of paragraph 8 Legislative Decree No. 199/2021);

b) on non-productive agricultural lands such as quarries and mines that have been closed, not recovered or abandoned or in an environmentally degraded condition, or the portions of quarries and mines that are not susceptible to further exploitation (letter c-bis of paragraph 8);

c) on areas under concession to Ferrovie dello Stato group, railway infrastructure operators, motorway concession companies or airport management companies on airport premises (letter c-bis1 of paragraph 8);

d) on areas inside factories and industrial plants, as well as in areas enclosed within a perimeter whose points are no more than 500 meters from the factory or plant itself (provided that such areas are not constrained pursuant to the second part of the Cultural Heritage and Landscape Code). In this regard, it should be noted that the Ministry of the Environment and Energy Security (MASE), in its opinion no. 130318 of 8 August 2023 - rendered following an environmental query by the Municipality of Villalba on the possibility of considering an existing photovoltaic plant as a unitary and stable complex or industrial plant - has clarified that are to be considered eligible, pursuant to Art. 20, lett. c-ter no. 2, Legislative Decree no. 199/2021, also the areas classified as agricultural enclosed within a perimeter whose points are no more than 500 meters away from a pre-existing ground-mounted photovoltaic plant with a power exceeding 20 kW (even if the latter is not built in an area zoned for industrial, artisan or commercial use) (letter c-ter no. 2 of paragraph 8);

e) on areas adjacent to the motorway network within a distance not exceeding 300 meters (letter c-ter no. 3 of paragraph 8).

The text converted into Law includes the possibility of installing ground-mounted photovoltaics also in quarries that have already been restored and those with a completed cultivation plan and not yet restored, as well as landfills or landfill lots that have been closed or can be restored.

The installation of photovoltaic plants with ground-mounted modules is not allowed:

i) on sites subject to remediation (letter b) of subsection 8);

ii) on areas classified as agricultural, enclosed within a perimeter whose points are no more than 500 meters away from areas of industrial, artisanal and commercial use, including sites of national interest, as well as from quarries and mines (letter c-ter) no. 1) of paragraph 8);

iii) on areas that are not restricted pursuant to the Cultural Heritage Code and are at least 500 meters away from cultural assets restricted pursuant to the second part of Article 136 of the Cultural Heritage Code (letter c-quater) of paragraph 8).

Such areas, although agricultural, were until now classified as suitable by article 20, paragraph 8 of Legislative Decree 199/2021 under letters b), c-ter no. 1 and c-quater.

Secondly, the prohibition of photovoltaic installations with ground-mounted modules does not extend to projects:

• aimed at the establishment of a Renewable Energy Community (REC);

• carried out in implementation of the investment measures of the PNRR or PNC or necessary for the achievement of the objectives of the PNRR.

Agrivoltaic plants

Therefore, the installation of agrivoltaic systems with modules elevated from the ground (so-called advanced agrivoltaic systems), as defined by Article 65, paragraphs 1-quater and 1-quinquies of Decree-Law No. 1/2012, i.e. which adopt innovative integrative solutions with the assembly of the modules elevated from the ground, exploit advanced technologies, also envisaging the rotation of the modules themselves, so as not to compromise the continuity of agricultural and pastoral cultivation activities of the farmland on which they insist, continues to be allowed in all agricultural areas, without the limitations provided for by the Agricultural Law Decree.

Till now, it’s not been clarified whether, in order to be exempted from the ban, additional subjective requirements must also be met by the developers of the advanced agrivoltaic project (e.g. agricultural entrepreneurs, temporary associations of enterprises - ATI), in line with the Ministerial Decree no. 436 of 22 December 2023 (“Agrivoltaic Ministerial Decree”) or whether these must be met only for the purposes of access to the incentives provided for therein, and therefore irrelevant for the purposes of the Agricultural Law Decree.

It is doubtful whether the prohibition should be extended to simple agrivoltaic systems, i.e. to systems that, while providing for the installation of modules on the ground, are constructed in such a way as to allow the integration of agricultural activity and electricity production and to enhance the production potential of both subsystems, without compromising the continuity of agricultural activity. In this hypothesis, the degree of integration between the two subsystems is less because the agricultural activity is carried out exclusively between the rows of panels.

On this point, however, it is necessary to recall a now consolidated jurisprudential orientation on the need not to assimilate agrivoltaic systems to ‘classic’ photovoltaic systems with modules located on the ground, since they are phenomena that are largely different from each other, despite their common starting point (the production of electricity from a clean source). And as a situation that does not overlap, they cannot be assimilated quoad effectum (see, inter alia, TAR Lecce Sez. II, Sentenza n. 1583/2022 and Consiglio di Stato Sez. IV, Sentenza n. 8029/2023). 

Moreover, if the government's objective is to protect agricultural activity and the land used for it, it would be illogical to ban ‘basic’ agrivoltaics; it would mean banning the combination of agricultural activity and renewable energy production.

PNRR related projects

The residual category of projects necessary to achieve the objectives of the PNRR could, at present, include, for example:

• collective self-consumption (because it is the subject of a specific PNRR measure and together with energy communities is the recipient of a specific incentive scheme, but not also remote self-consumption); 

• innovative photovoltaic systems or photovoltaic systems combined with hydrogen.

• photovoltaic plants for the production of biomethane and biogas.

Already commenced procedures

The new provision will not apply to projects currently undergoing the approval process more precisely with reference to the PV plants that have already filed the authorisation application or for which the authorisation or the environmental procedure has already started at the date of entry into force of such Agricultural Law Decree (i.e., 16 May 2024).

The provisions do not apply to projects for which, on the date of entry into force of the Agricultural Law Decree, at least one of the administrative procedures, including environmental assessment procedures, necessary to obtain the qualifications has been commenced for the construction and operation of the plants and related works or at least one of the same authorizations has been issued.

The provision does not explain what is meant by procedures already ‘commenced’.

A. For a less restrictive interpretation of the rule, the mere submission of an application for a PAS, AU, PAUR, EIA Screening, EIA by the date of 16 May 2024 could be deemed sufficient to consider that the procedure has been formally commenced.

B. If a more restrictive interpretation were to be adhered to, procedures already commenced could be understood as follows:

• PAS: if the documentation attached to the PAS is complete, the procedure may be deemed to have already commenced when the PAS is submitted to the Municipality, even if, as of 16 May 2024, the 30-day deadline for consolidating the PAS has not expired. On the other hand, in the hypothesis that, following the submission of the PAS application, it is necessary to acquire additional acts of consent required by law, the commencement of the procedure could coincide with the communication of the commencement of the procedure/convocation of the Services Conference by the Municipality;

• AU: the procedure is deemed to be initiated when the competent Administration sends to the proponent the notice of commencement of proceedings pursuant to Articles 7 and 9 of Law No. 241/1990;

• EIA Screening/ EIA /PAUR: the commencement of the procedure coincides with the publication of the environmental documentation on the website of the proceeding Authority and with the simultaneous communication of its publication to all potentially interested Authorities.

The interpretation to be given to the term ‘procedure already commenced’ appears to be another uncertain point of the text of the Agricultural Law Decree, which has not been clarified, neither during its conversion proceeding into law.

Duration of the surface right agreements

In addition to the above, Article 5, paragraph 2-bis of the Agricultural Law Decree provides that all surface right agreements, including those executed in the form of preliminary agreements, concerning land falling within the areas considered suitable for the installation of renewable energy plants, pursuant to Article 20, paragraph 1, lett. a, of Legislative Decree No. 199 of 8 November 2021, shall be entered into for a minimum term of 6 years. Should the parties agree on a shorter term or grant the surface right by omitting the indication of a specific term, the relevant agreement shall be deemed to be entered into for a term of 6 years.

It is further specified that at the end of the first 6-year term, the surface right agreement is automatically renewed for a further period of 6 years. At the end of this second period, the agreement is tacitly renewed under the same conditions, unless a party informs the other - by registered letter and at least six months before the relevant expiry date - of its intention to renew the agreement under new conditions or not to renew it at all. The party so notified has 60 days from receipt of such notice to reply. If no reply is received or if the parties fail to agree otherwise, the relevant surface right agreement shall be deemed terminated on the end of the second validity period.

The above-mentioned provisions also apply to the preliminary/final agreements already in place, unless one of the parties decides to withdraw from the relevant agreement within 60 days from the day of entry into force of Law no. 101/2024. Such right of withdrawal may be read as a way out granted to the landowners to avoid the new tax regime applied to surface right rents as of 1 January 2024. In fact, the landowners are now in the position to renegotiate these rents in order to offset the increase in their taxation.

Article 5, paragraph 2-bis of the Agricultural Law Decree appears to be quite unclear and open to different interpretations. In particular, it is not fully clear whether the 6-year term refers to the duration of the preliminary/final surface right agreements or to the duration of the surface right established by virtue of such agreements. Should this second interpretation prevail, the right of withdrawal from preliminary agreements having a duration of less than 6 years exercised by landowners in the time window of 60 days from the entry into force of Law no. 101/2024 would be deemed unlawful.

In light of the above, it is expected that, especially in a first phase after the entry into force of the Agricultural Law Decree, there will be uncertainty on how to manage the surface right agreements and this may delay or complicate the negotiations aimed at acquiring the availability of the land for the development of new renewable energy plants.

Conclusions

In conclusion, the impact of the Agricultural Law Decree on the solar energy market would be less dramatic than it seemed at first reading thanks to the above-mentioned exceptions to the ban, but it appears quite clear that uncertainties as to the interpretation of already commenced procedures could underpin an uncooperative approach by local authorities even with reference to projects started before May 16. 

It also evident that agrivoltaic plants are envisaged by the Government as a new cooperation model between the PV generation industry and the agricultural activity 

Investors will have to pay close attention their relationship with the farmer  and to the relevant seriousness and professionalism in carrying its agricultural activities. The farmer will have to be considered as as an EPC contractor, O&M operator or electricity purchaser under the PPA and as such the relevant contractual documents shall be structured taking into a rigorous risk allocation also through substitution mechanisms. Title on lands shall also take into account the performance of agricultural activities.

To get an overall view of the structure and content of the Decree Fer X, please refer to our article published on 10 April 2024.

Power Quotas Allocated for Tenders

The power quotas allocated for each tender are not fixed but are determined by the MASE (with the technical support of Terna and GSE) based on, among others:

• - the demand curve;

• - the technology;

• - specific coefficients identified for each market zone;

• - the expected evolution of electrical demand;

• - the number of authorization processes initiated and completed;

• - the expected evolution of the transmission grid, and

• - the realization times, useful life, and costs of the various renewable energy technologies.

The demand curve is determined by interpolating five pairs of electricity quantity/price according to what is detailed in Annex 2 to the new draft decree.

Compared to other incentive mechanisms, the integration of market regulation is quite pronounced, but the reasons are clear: to avoid excessive burden on electricity tariffs considering the significant power that needs to be incentivized and to avoid aggravating grid instability while optimizing secure system management, considering the non-programmable nature of the energy volumes to be produced.

Overall, the incentivized quotas have been reduced for photovoltaic plants with a power higher than 1 MW (from 45 to 40 GW) and increased for photovoltaic plants that access directly through registration, i.e., those with power equal to or lower than 1 MW (from 5 to 10 GW).

Finally, among the photovoltaic plants incentivized under the new draft, those installed on water surfaces are now included.

Tariffs

The percentage reduction offer is no longer necessarily at least 2% but will be determined from time to time with each publication of the call for tenders.

For plants with a power higher than 1 MW, the tender base price now varies depending on particularly high or low-cost conditions. Specifically, the following have been introduced:

• the higher operating price and

• the lower operating price,

respectively equal to 95 Euro and 70 Euro for both wind and photovoltaic.

Specifically, the “higher operating price” is defined as the base auction price in the case of particularly high-cost conditions.

The “lower operating price”, on the other hand, is the base auction price in the case of particularly low-cost conditions.

Thus, the “awarding price” should be the operating price (higher, lower, or otherwise fixed within this range) reduced by the percentage discount offered and accepted in the tender. However, the draft decree, in defining the “awarding price,” seems to have not considered the introduction of the higher and lower operating prices, referring only to the higher one.

This misalignment between the awarding price and the higher/lower operating price is also replicated in the provisions regarding the execution of offers (Article 4, paragraph 3) and in determining the demand curve.

Relations with Long-term PPAs and the Dispatching Service Market

In the previous version of the draft decree, it was envisaged that the non-incentivized power quota could be subject to a long-term electricity supply contract (so-called Long-Term PPA). This provision was unnecessary since, regardless of the incentive, all the energy produced by the plant remains the ownership of the producer.

In the new draft decree, therefore, the reference to the non-incentivized energy quota has been removed, and as of today, even if the entire power of the plant is incentivized, the producer can freely enter into a long-term PPA to monetize all the energy produced by the plant.

Entering in a Long-Term PPA is still among the priority criteria.

However, many aspects related to the interaction between the Fer X CFD mechanism and the Long-Term PPA remain to be understood, including the fixed or necessarily indexed and variable nature of the consideration.

As for the obligation to participate in the Dispatching Service Market operated by Terna, this has been extended to all plants with a power higher than 1 MW, i.e., all those plants that will participate in the tenders.

In this context, it is provided that the payment of the awarding price by the GSE occurs based on producibility (rather than actual input) in cases of plants subject to production cuts resulting from orders issued by grid operators or dispatching orders issued by Terna on the Balancing Market (typically production limitation orders, i.e., grid input limitation) and/or on European balancing platforms. This leads to greater market integration of renewable energy plants and, at the same time, reduces the volume risk borne by these plants.

Currently, the relationship between the determination of the incentive tariff under Fer X and the consideration that will be set by the GSE, following the issuance of the relevant Ministerial Decree, for the so-called “second Energy Release” under Law Decree No. 181/2023 remains unresolved.

Specifically, it is noted that this latter mechanism is structured as follows:

• on the one hand, energy-intensive companies, in return for meeting certain commitments related to implementation, can purchase renewable energy and the related guarantees of origin in advance for a period of 3 (three) years through a two-way contract for difference at a price set by the GSE itself (“First Contract”) and in return for certain commitments by the energy-intensive companies (see below);

• on the other hand, and upon the commissioning of the plants (as defined below), energy-intensive companies enter into a contract for difference with the GSE for the return, over a period of 20 (twenty) years of the amount of electricity advanced (and the related guarantees of origin) during the period mentioned above (“Second Contract”).

To access the mechanism, energy-intensive companies must commit, at the time of the conclusion of the First Contract, to realize additional plants and thus new renewable energy generation capacity. Alternatively, energy-intensive companies can commit to purchasing the newly generated renewable energy from third parties through appropriate long-term supply contracts (i.e., Long Term Corporate PPA). In this second case, the energy-intensive company also commits on behalf of the third-party producers to the GSE for the future return of the advanced electricity.

It is not yet clear whether the outcomes of the Fer X tenders, and the related awarded tariffs will be considered in determining the consideration that the GSE will request for the purchase of electricity by energy-intensive companies under the mechanism of Law Decree No. 181/2023.

It should be noted, in any case, that the Fer X decree draft under review will not be the final one: indeed, the Director General of MASE, Mr. Noce, recently stated that the Ministry is incorporating ARERA’s indications aimed at making the tenders more competitive. In its opinion dated 6 June 2024, ARERA specifically suggested (i) to introduce a limit on the number of expressions of interest that can be filed with reference to each production plant (this should lead to the possibility of participating in no more than three tenders in the period 2024-2028); (ii) to discard (for a quota equal to a minimum capacity calculated in terms of the number of offers or percentage relative to the minimum contingent provided by the tender) the offers that are in the last useful positions even in case of offers lower than the minimum contingent.

On 11 June 2024, Mr. Noce finally stated that MASE aims to obtain “temporary” approval of the Fer X decree from the European Commission for a “transitional” period until 31 December 2025, in order to start the competitive procedures already by 2024. Consequently, once this “transitional” period is over, it will be necessary to proceed with a new approval of the incentive scheme for the subsequent period until 2028.

The content of this document is for information purposes only and is not and cannot be intended as legal advice on the topics dealt with. For further information please contact Piero Viganò and Ernesto Rossi Scarpa Gregorj. 
 

[1] www.advant-nctm.com/en/news/articles/the-new-draft-of-the-ministerial-decree-fer-x-relevant-changes-and-main-novelties.

Some of the key statements of said study are examined below. Please remember that the following indications should be regarded as general and may not be valid or applicable to every case, as the relevant circumstances of the specific case must be evaluated from time to time.

State economic incentives

Incentivized RECs are eligible for three specific state grants:

1. the premium tariff stipulated in the Decree of the Minister of Environment and Energy Security No. 414 of December 7, 2023 (hereinafter the “CACER Decree”), based on the energy shared under CACER;

2. the fee for the valorization of self-consumed electricity (or ARERA fee), provided by the Integrated Paper for Distributed Self-Consumption (“TIAD”);

3. the non-repayable grant, fully financed by the PNRR, provided under the CACER Decree aimed at partially covering the costs of building or upgrading certain renewable energy production facilities.

These contributions are managed by the GSE in compliance with the Operating Rules for Access to the Service for Diffuse Self-Consumption and PNRR Contribution dated February 23 and updated on April 22, 2024 (hereinafter the “Operating Rules”). In order to benefit from the premium tariff and ARERA fee, RECs are required to access the service for distributed self-consumption provided by the GSE, through a special application submitted by the so-called referent (soggetto referente)[1]. Upon receipt of the application, the GSE will carry out technical-administrative verifications on the documentation, attached by the referent, related to the production facilities and the REC. Only in the event of a positive outcome of this control activity, the GSE will sign the agreement for the regulation of the service for distributed self-consumption. The above mentioned technical-administrative controls are aimed at verifying the occurrence of the requirements and continue even after the signature of the agreement during the performance phase; therefore, if the GSE finds the absence of one or more of the eligibility requirements or the issuance of false statements, it orders the forfeiture of the incentives, with the full recovery of any amounts already paid.

Legal subjectivity

The requirement of the legal subjectivity of the RECs, imposed by Article 31, first paragraph, letter b) of Legislative Decree No. 199/2021[2], prevents the establishment of RECs either in the form of a temporary business association (or ATI) or in the form of a public – private partnership, which do not create legal entities distinct from the associates[3].

Given the legal subjectivity of RECs, the contributions paid by the GSE are intended for the REC and not for its members, even when the REC assigns the status of referent to an entity other than itself[4]. The members of the REC, in turn, may be credited with the GSE’s contributions only possibly, if the allocation is provided for in the articles of incorporation, a regulation, or a decision of the relevant REC body. In fact, no regulation requires the REC to allocate the GSE’s economic contributions among its members.

Energy sharing

According to the current regulations, three aspects related to the sharing of self-generated energy by the REC can be identified:

1. sharing is implemented through a direct relationship between the REC and its consumer members;

2. sharing occurs virtually. In fact, members do not physically consume the self-generated power from the REC, as the REC has to feed into the public grid all the electricity it has not self-consumed on site, and REC members can consume only the electricity taken from the public grid[5];

3. the incentive tariff covers electricity sharing only and not also other energy carriers that are self-producible by the REC from renewable sources, such as thermal energy.

The essential feature of sharing, peculiar to RECs, defines their mutualistic purpose, understood in the sense of service management of the relevant body toward its members. The mutualistic purpose assumes a bilateral relationship between the REC and its members.

In the view of this bilateral relationship, the performance of the REC may consist in the sharing of profits among its members or in further performance, even of a noneconomic nature[6]. The performance of members, on the other hand, may consist of the provision of their consumption data or the work they provide to the REC.

Of course, the essential feature of sharing, peculiar to RECs, does not imply that all its members must participate in sharing. Indeed, it is not prescribed that the REC has an exclusive purpose referring only to the production and sharing of energy from renewable sources for self-consumption. So that it may be that subjects disinterested in the aforementioned activities, but interested in other[7], are part of the REC, provided, of course, that these subjects do not represent the totality of the members[8]. In detail, according to what the Operating Rules prescribe, the REC assumes the presence of (i) at least two members who are consumers and/or producers of energy and (ii) at least two PODs connected to a consumer utility and a production facility[9].

Members

REC members must fall into at least one of the following subject categories:

1. entrepreneurs whose sole or main activity is not in the energy sector falling under the European definition of MPMIs (micro and small and medium-sized enterprises)[10];

2. individuals or private entities that do not qualify as entrepreneurs;

3. private research and training organizations, religious organizations, those in the third sector and environmental protection;

4. public bodies included among the local governments contained in the list periodically released by ISTAT[11].

The “open door” requirement

The so-called “open door” requirement provided for RECs shall be interpreted as free access by interested parties and the provision of an ad nutum right of withdrawal for end customers.

By virtue of the first element, it is believed that the REC cannot legitimately deny admission to the would-be consumer member even when the current members’ consumption equals or exceeds the REC’s self-generation in the various time slots in which shared power is calculated. Moreover, the REC cannot surreptitiously deny entry to would-be members by requiring disproportionate or unfair requirements, such as excessive initial contributions; nor could the REC restrict entry to one or more of the three subsets of the notion of “final customer” of energy, namely (i) household customers; (ii) non-household customers; and (iii) energy consumers belonging to low-income or vulnerable households.         
In any case, the element of open participation does not prevent the REC from differentiating the entry requirements prescribed for aspiring members, provided that such differentiation is fair and proportionate. Further, such requirement does not preclude the REC from being formed by members from only one of the classes listed above, even though such an organization was conceived by the EU legislature as a means of preferentially promoting individuals who are energy consumers; thus, a REC, as to its minimal membership, could be formed by two members from the single class of MPMIs, if they shared the REC’s self-produced energy. 

The second element, that of ad nutum withdrawal of end customers, on the other hand, does not prevent the REC from conditioning the effectiveness of the withdrawal against it on compliance with certain conditions. In addition, if the withdrawing party has committed to remain in the REC until the expiration of a certain term, in the case of early withdrawal, any agreed-upon fees for co-participation in investments incurred remain firm, which must also, however, be fair and proportionate.

End customers

Members of the incentivized REC energy consumers retain their rights as end-customers, including the right to choose their own seller; therefore, a statutory or regulatory stipulation by which the REC required its members to purchase energy from the REC or other energy services from the owner of the energy production facility leased to the REC would be null and void.

The requirement of autonomy

Any REC must be autonomous in accordance with Article 31, first paragraph (b) of Legislative Decree No. 199/2021. The content of this requirement is not specified. However, it finds its basis in recital 71 of dir. 2018/2001/EU: “avoid abuse and ensure broad participation.”

Autonomy, therefore, serves the function of prohibiting internal and external control of the REC. This prohibition is reinforced by a second requirement in the same directive, that the REC is an entity that “is effectively controlled” by its members[12]. 

The REC, therefore, can be said to be autonomous when it is actually controlled by the whole of its members and not instead by some of its members, a minority group of them or outside parties.

Democratic character

Democratic character is imposed on any REC, regardless of the legal form used to constitute it. The necessary democratic character of RECs implies certain considerations:

1. the notion of “control powers” repeatedly used in Legislative Decree No. 199/2021 to regulate RECs[13], should be understood as voting rights exercisable in the REC. Consequently, it follows from Article 31(1)(b) and (d) of Legislative Decree No. 199/2021 that every member of the REC who is an energy consumer must be entitled to excercise at least one vote in decisions within the competence of its members;

2. the REC may not recognize participation rights other than voting in member decisions;

3. despite the conception of the RECs as instruments of activation and self-protection of energy consumers, the votes due to members falling into this category are not required to prevail. So that it might legitimately happen that, among REC members, MPMIs hold more votes than individuals;

4. public entities can never have a majority of votes in the REC, unless the REC was established to promote the use of thermal energy from renewable sources;

5. the necessary democratic character of the REC does not dictate that it should provide for capital voting for its members. However, if multiple voting were to be provided for, ceilings should still be set on the votes that can be excerised or at any rate rules should be established to prevent the realization of situations of control of the REC by individual members or their minority groups. In addition, the deliberative power of the members of the REC should, in any case, be recognized in certain matters, including: appointment, compensation, removal and liability of directors and, if any, members of the supervisory body and the statutory auditor; organization of the body in which all members have the right to participate; allocation of any profits; amendments to the articles of incorporation; and dissolution of the entity[14].

Practicable activities

The object of the REC has a dutiful component, i.e., self-production and sharing of energy from renewable sources, and an optional component, i.e., other activities, different from the two mentioned, including: the sale and storage of energy self-produced or purchased from third parties, the production of any energy (thus not only electricity) from renewable sources intended for the consumption of its members, the promotion of “integrated home automation, energy efficiency interventions,” as well as the provision of “electric vehicle charging services to its members [...]”[15].

It must be noted that the activities of the optional component also include those disconnected with energy activities, which may even be prevalent (even in terms of turnover), subject to the limitation imposed by the specific regulations applicable by virtue of the legal form adopted for the REC[16].

The self-production of energy

Energy production and storage facilities must be “in the availability and under the control of the community” according to the requirements of Article 31, second paragraph (a) of Legislative Decree No. 199/2021. Therefore, for the purpose of self-generation, it is not necessary that the REC owns the facilities, it being sufficient that it has the availability of the facilities, which is achieved through the signing of an agreement between the REC and the energy producer - third party or member of the REC. It must be possible to infer from such an agreement that the producer conducts the relevant facilities “in accordance with the agreements defined with the community for the purposes of the renewable energy community and in compliance with the provisions of the relevant regulations”[17].

It must be noted that the status of “third-party producer,” i.e. one who offers the availability of the plant to the REC, can also be assumed by large enterprises or those entities whose main business or professional activity is the production and exchange of electricity, considering that they do not belong to the REC.

The REC, which has only the availability of the plant and not its ownership, corresponds to an energy aggregator, both on the production side and on the consumption side. Moreover, in such a case, the REC is not required to pay excise tax on the energy produced and does not own any power plant (in the meaning of Article 54 Legislative Decree No. 504 of October 26, 1995).

The REC will rarely qualify as a self-producer within the meaning of Article 2(2) of Legislative Decree No. 79/1999, since it is unlikely to physically self-consume at least seventy percent of its self-generated electricity, as the latter provision requires. On the contrary, it is more likely that the self-generated electricity from the REC, possibly diminished by the little self-consumed on-site, will be fully fed into the grid, if necessary after being fully or partially stored in special facilities.

For the purpose of sharing renewable energy internally within the REC, while energy production can also be third-party only, consumption must be only of REC members.

Specifically, “shared electricity” under the TIAD, is defined as “in each hour and for the set of connection points located in the same market area that are relevant for the purpose of a configuration for diffuse self-consumption, the minimum between the electricity fed in for the purpose of sharing and the electricity withdrawn for the purpose of sharing”[18]. Whereas, “self-consumed electricity,” i.e. the shared electricity that enjoys the premium tariff, is defined as “per hour, the shared electricity pertaining only to the connection points located in the portion of the distribution network underlying the same primary substation”[19] and relates only to the energy fed in from generation plants (or by upgrades) that (a) individually considered, have a power have a capacity not exceeding 1 MW and (b) collectively considered, have a total capacity originating, for at least 70 percent, from plants that came into operation after Dec. 15, 2021[20].

The self-consumed and incentivized electricity also includes the electricity stored by the REC, after being self-generated and before being fed into the grid.

A REC may also receive the premium tariff on energy sharing realized on several primary substations, provided, however, that the corresponding referent (possibly different from the one in charge for another configuration referable to the same REC) submits, for each primary substation constituting a dedicated self-consumption configuration, an application to the GSE for access to the service for widespread self-consumption.

So, more than one CACER may belong to a REC; in such a case, statutory provision can be made for the plurality of CACERs to be matched by an organizational articulation of that REC (such as a plurality of separate assemblies), which allows its members to be subdivided according to their membership in its different CACERs.

The qualification

The REC is to qualify as a business entrepreneur for the following three reasons:

1. the commercial (i.e., non-agricultural) nature of energy activities is certain;

2. energy activities, even when carried out by a REC that is an agricultural entrepreneur, do not, as a rule, qualify as related within the meaning of Article 2135, third paragraph, of the Italian Civil Code;

3. even in the presence of RECs in the form of nonprofit entities, their activities corresponding to commercial enterprises should usually be predominant, if not exclusive, over non-business activities.

It follows that the REC will mostly be subject to the statute of the commercial entrepreneur. Therefore, if the relevant conditions are met, a REC may, for example, be required to register in the commercial register or be subject to judicial liquidation.

In particular, the incentivized REC qualifies as an energy entrepreneur[21], even assuming it outsources all its economic activities.

The possible types, subtypes, and qualifications

Regarding the legal form that can be adopted by RECs, the study confirms the already well-known situation of regulatory uncertainty. Indeed, there is no single optimal form and regulation for all RECs; as they can differ greatly in terms of membership (quantitatively and qualitatively), territorial scope, purposes, activities, and corporate and financial structure.

In any case, in adopting the legal form of RECs, it must be taken into account that their main objective, as stipulated in Article 31, Paragraph 1 (a) of Legislative Decree No. 199/2021, is “to provide environmental, economic or social benefits at the community level to its partners or members or to the local areas in which the community operates, and not to make financial profits.”

Therefore, the prevailing nonprofit purpose of the RECs, imposed by the aforementioned rule, prevents the REC from being established in one of those legal forms that must pursue, at least predominantly, the purpose of profit, pursuant to Article 2247 of the Italian Civil Code, including: simple company, general partnership, limited partnership, limited liability company, joint stock company, limited liability partnership and benefit company. 

While it can be considered that the requirement of the prevailing nonprofit purpose of RECsallows the establishment of RECs in the forms of (i) cooperative with prevailing mutuality or non-prevailing mutuality but with statutory clauses in accordance with Article 2514, first paragraph, of the Italian Civil Code or (ii) qualified as a social enterprise.

It must be also noted that the requirement under consideration shall not be considered as violated when, in compliance with the discipline of the chosen organizational model, the REC allocates GSE contributions among its members.

Notwithstanding the above, the following legal forms may in any case be considered to comply with the REC regulation outlined above:

• the association (recognized or unrecognized), first of all, as governed by the Italian Civil Code. The association may qualify as a commercial enterprise, may also have public entities among its members, and may pursue a mutualistic or altruistic purpose – but not a profit-making one. The REC-association may also acquire the status of an ETS (“Ente del Terzo Settore”) or social enterprise.

  In contrast, the REC cannot be established as a voluntary organization or a social promotion association, since the regulations of the latter two legal forms prevent the entry of certain entities – such as private for-profit entities or public entities that qualify as local governments – and, therefore, the requirement of free entry, specific to RECs, would not be met.

  The REC-association enjoys two facilities: (i) it can be formed with only two members, unlike the cooperative-REC, which requires at least 9; and (ii) it reduces the costs of establishing and maintaining the structure, especially if it is in the form of an unrecognized association, unlike RECs in corporate form. However, the association framework was not designed for the exercise of entrepreneurial activities and creates some complexities for the case where public grants received from the GSE are to be distributed among the members. In fact, due to its necessary nonprofit purpose, the association form would not allow the distribution of GSE contributions. It is only with the status of an ETS or social enterprise that the REC association can grant its members said contributions[22], provided that it regulates its activities of producing, storing and sharing energy for self-consumption purposes through partial contracts (contratti parziari) (i.e. contracts determining the price according to the profits generated by the producing entity of the goods and/or services covered by these contracts). The same REC cannot, however, distribute the same amount of profits as reversions, in that case realizing an illegitimate direct distribution of profits, which is allowed only to the social enterprise in the form of a cooperative, pursuant to Article 3, paragraph 2-bis, of Legislative Decree No. 112/2017;

   

• the foundation, provided it has an open and democratic structure, is also an adoptable form. However, according to the thesis that the foundation is not functionally neutral, it cannot be deemed suitable if a mutualistic purpose is to be assigned to the ERC, since it must always pursue a public benefit purpose; this would be the case if the majority of REC members were interested in establishing mutualistic exchanges with their foundation. In addition, this legal form does not allow the distribution, among its members, of contributions received from the GSE as an employment of profits, otherwise violating its necessary nonprofit purpose.    
  Again, the REC foundation can also acquire the status of an ETS or social enterprise;

   

• the profit-making corporation as long as it does not primarily pursue the profit-making purpose. This constraint is respectable only by adopting the status of a social enterprise;

   

• the cooperative is the optimal form for most of the RECs since its discipline best suits their requirements.     
  The REC-cooperative can, then, qualify as a social enterprise, a benefit corporation and a social enterprise (impresa sociale).

  The REC can correspond to a consortium cooperative, since this company is not directly governed by Article 2602, first paragraph, of the Italian Civil Code and is neither obliged to have a corporate purpose containing only consortium activities nor to pursue the mutualistic-consortium purpose with a membership consisting only of members with the subjective requirements imposed by the legislature.

  The REC-cooperative must consist of at least 9 members[23].

  The mutualistic purpose of the REC-cooperative can vary widely, as cooperative societies can carry out “simultaneously more than one type of mutualistic exchange”[24].

  Moreover, the REC-cooperative always qualifies at least as a production cooperative when its members are only energy consumers. Indeed, such a cooperative, in order to carry out its mutual activity, makes use of “the contributions of goods or services by its members” within the meaning of Article 2512, first paragraph, No. 3 of the Italian Civil Code; contributions which, if the REC were merely sharing electricity virtually, would have as their object the computer data on their energy consumption.

  It is also necessary to point out that an important advantage of the REC-cooperative over the REC-association is the possibility of providing, in the articles of incorporation of the former, for the issuance of financial instruments in accordance with the regulations provided for S.p.A.

  However, the REC-cooperative is prevented from showing prevalent mutuality in case its corporate purpose contemplates only the self-production and sharing of energy from renewable sources, and in the related mutual exchange its performance is a share of the operating profit. In fact, according to Article 2513(1)(c) of the Italian Civil Code, the quantification of prevalence is required only on the basis of cost items represented in the income statement (conto economico), into which a share of profit cannot be computed.

[1] The characteristics of the REC Referring Party are set out in § 1.2.2.1 of the Operating Rules.

[2] According to which “the community is an autonomous subject of law”.

[3] However, to the contrary, see ARERA Resolution 318/2020/R/eel of August 4, 2020, and § 2.3 of the Technical Rules for Access to the Shared Electricity Enhancement and Incentive Service, GSE, dated April 4, 2022, according to which a REC could be established as a partnership.

[4] Thus, the amounts paid by the GSE are to be qualified, for accounting and civil law purposes, as revenue or income for the REC, so that if these amounts are to be distributed among REC members, they must be transformed into a part of the operating profit.

[5] Sharing, therefore, assumes that the REC can have data on its members’ electricity consumption.

[6] Think of an REC that offers energy efficiency or electric car charging services to its members, or an REC whose members decide to allocate economic benefits to parties other than themselves or to general interest activities in favor of the community where the REC operates.

[7] It may even be the case that some REC members do not wish to make direct use of any of the activities carried out by RECs, perhaps only wanting to finance them.

[8] It is advisable, therefore, that the deed of incorporation of the REC (even when it is not incentivized) provides for the obligation of some of its members to become energy consumers, thus ensuring continued compliance with Article 31, second paragraph, letter b) of Legislative Decree No. 199/2021, according to which “self-produced energy shall be used primarily for instantaneous on-site self-consumption or for sharing with community members [...].”

[9] See § 1.2.2 of the Operating Rules.

[10] See Art. 2 of the Annex to Rec. 2003/361/EC of May 6, 2003, which states that “[t]he microenterprise category of small and medium-sized enterprises (SMEs) consists of enterprises which employ fewer than 250 persons and whose annual turnover does not exceed EUR 50 million or whose annual balance sheet total does not exceed EUR 43 million. 2. In the SME category, a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover or annual balance sheet total does not exceed EUR 10 million. 3. In the SME category, a micro enterprise is defined as an enterprise which employs fewer than 10 persons and has an annual turnover or an annual balance sheet total not exceeding EUR 2 million”.

[11] In view of their local character, it is prescribed as an additional requirement, only for the latter class of members, that the said entities be located “in the territory of the same municipalities in which the facilities” of self-production of the corresponding CER are located, pursuant to Article 31, first paragraph, letter b) of Legislative Decree No. 199/2021.

[12] See Art. 2(16)(a) of dir. 2018/2001/EU.

[13] See, in particular, Articles 10(1)(b) and 31(1)(b) and (d).

[14] This rule, which applies in the absence of different, stricter provisions provided for specific forms, is derived from the entire system of collective bodies under private law.

[15] See Article 31, second paragraph (f) of Legislative Decree No. 199/2021.

[16] Such a situation may occur, for example, when the REC has the status of an ETS (owing to Art. 5 Legislative Decree No. 117/2017) or a social enterprise (owing to Article 2 Legislative Decree No. 112/2017).

[17] See § 1.2.2 of the Operating Rules.

[18] Article 1.1(t) of the TIAD.

[19] Article 1.1(r) of the TIAD.

[20] In any case, pursuant to § 1.2.1.2 of the Operating Rules, the aforementioned plants must have come into operation after the regular establishment of the REC or after the REC’s article of incorporation comply with all the indications contained in the Operating Rules.

[21] See Article 2, paragraph 25-terdecies of Legislative Decree No. 79/1999, which defines the electricity contractor as “any natural or legal person, excluding final customers, who performs at least one of the following functions: generation, transmission, distribution, aggregation, demand management, storage, supply or purchase of electricity, who is responsible for the commRECial, technical or maintenance tasks related to these functions”.

[22] Thanks to the final part of Articles 8, third paragraph (d) of Legislative Decree No. 117/2017 and 3, second paragraph (e) of Legislative Decree No. 112/2017.

[23] See Article 2522, first paragraph, of the Italian Civil Code. In fact, the second paragraph of this rule, which allows a cooperative company to be established by at least 3 members as long as they are natural persons and as long as the company adopts the rules of the S.r.l., places a subjective limitation that conflicts with the requirement of free participation of RECs.

[24] See Article 2513, second paragraph, of the Italian Civil Code, which provides for the so-called “mixed cooperative.”

A new draft of the Ministerial Decree of the Ministry of the Environment and Energy Security (the so-called “FER X” and, hereinafter also, the “Decree”), implementing Articles 6 and 7 of Legislative Decree No. 199/2021 and containing provisions for the definition of new support mechanisms for energy produced from renewable energy sources, began to circulate in early March. The most important aspects of the draft Decree are analyzed below.The aim of FER X is to support the production of energy by plants powered by renewable sources with generation costs close to market competitiveness, and in particular through the following types of plant:

(i) photovoltaic plants;(ii) wind power plants;(iii) hydroelectric plants;(iv) treatment plants for residual gases from purification processes.

• the “complete reconstruction of a plant other than a hydroelectric plant”, which means an operation carried out on a site on which, prior to the start of the reconstruction works, another power plant existed, of which only the electrical infrastructure, underground electrical infrastructure and buildings connected to the operation of the pre-existing plant may be re-used[1];
• the “multi-section plant”, that is the plant made up of several sections that converge on a single grid connection point and that meets the following requirements: the uniqueness of the owner of the plant sections; the presence of autonomous measuring equipment for the energy produced in each section[2] and the parallel connection to the grid of the last section within and no later than two years from the date on which the first section enters into operation;
• the “nominal power of a plant”, which is the sum, expressed in MW, of the nominal electrical powers of the alternators (or, where there are none, the generators) belonging to the plant itself, where the nominal power of an alternator is determined by multiplying the nominal apparent power, expressed in MVA, by the nominal power factor shown on the alternator’s rating plate data, in accordance with standard CEI EN 60034, with the following exceptions:

i. for wind power plants, the power is the sum of the nominal powers of the individual wind turbines constituting the plant, as defined in accordance with CEI EN 61400; where the individual wind turbine has a rated power equal to or less than 0.5 MW, the above definition applies;ii. for hydroelectric plants, the power is equal to the nominal power of the water derivation concession;iii. for photovoltaic plants, the nominal power is determined by the lower of the sum of the individual nominal powers of each photovoltaic module forming part of the same plant, measured at STC conditions (Standard Test Condition) and the nominal power of the DC/AC conversion unit, as defined by the relevant standards defined by the Italian Electrotechnical Committee, expressed in kW.

• until 31 December 2028 or,
• for plants with a nominal capacity lower than or equal to 1 MW, on the date on which the sum of 5 GW of financed capacity is reached, if that date is before the deadline of 31 December 2028.

The quota of energy that can be incentivized through auction procedures for the five-year period 2024-2028 amounts to a total of 62.15 GW, reserving:

(a) 45 GW for photovoltaics[5];(b) 5 GW for wind power;(c) 63 GW for hydropower;(d) 02 GW for residual gases from purification processes.

2. RES plants with a capacity equal to or lower than 1MW

According to Article 3 of the draft Decree, plants producing electricity from renewable energy sources (hereinafter referred to as “RES plants”) with a capacity lower than or equal to 1 MW have direct access to the support mechanism, provided that the relevant works have been started after the entry into force of the Decree (for the determination of the date of commencement of works, see what is set forth below regarding Article 3, paras. 5 and 6) and that the same plants are in possession of the performance and environmental protection requirements “necessary also to comply with the principle of Do No Significant Harm (DNSH)[6], as well as the requirements set forth in Annex 2 and declined in the operating rules set forth in Article 10”. These plants benefit from an auction price equal to the operating price, defined in Annex 1 of the draft Decree for each source, as follows:

• for the photovoltaic source: 85 €/MWh[7] ;
• for wind power: 80 €/MWh;
• for the hydraulic source: 110 €/MWh;
• for residual gases from purification processes: 100 €/MWh.

3. RES plants with a capacity higher than 1 MW

On the other hand, RES plants with a capacity higher than 1 MW access the support mechanism provided for by the Decree, through participation in competitive procedures, within the contingency limits indicated above, where participants are required to offer a discount on the above-mentioned auction prices. The discount offered cannot be less than 2% of the above-mentioned auction prices.In order to be successful in the competitive procedure, the following requirements must be fulfilled:

a) possession of the authorization title or, at the producer’s request, of the favourable decision of environmental impact assessment pursuant to Legislative Decree No. 152/2006 (“EIA”)[8];b) grid interconnection solution definitively accepted;c) compliance with national and EU environmental performance requirements and standards, which are also necessary to comply with the DNSH principle, as well as with the requirements set out in Annex 2 of the Decree and defined in the operating rules.d) possession of a declaration by a banking institution certifying the financial and economic capacity of the participant in relation to the scope of the operation, taking into account the expected profitability of the operation itself and the financial and economic capacity of the corporate group to which it belongs, or, alternatively, the commitment of the same institution to finance the operation.

1. the mitigation of climate change, if such activity leads to significant greenhouse gas emissions;
2. the adaptation to climate change, if such an activity leads to a worsening of current and future expected adverse climate effects on the activity itself or on people, nature or assets;
3. the sustainable use and protection of water and marine resources, if such activity is detrimental to the good ecological status or potential of water bodies, including surface and groundwater, and to the good ecological status of marine waters;
4. to the circular economy, including waste prevention and recycling, if:

• this activity leads to significant inefficiencies in the use of materials or in the direct or indirect use of natural resources such as non-renewable energy sources, raw materials, water resources and soil, at one or more product life stages, including in terms of the products’ durability, reparability, upgradeability, reusability or recyclability;
• this activity results in a significant increase in the production, incineration or disposal of waste, with the exception of the incineration of non-recyclable hazardous waste;
• long-term disposal of waste could cause significant, long-term damage to the environment;

5. the prevention and reduction of pollution, if that activity results in a significant increase in emissions of pollutants into the air, water or soil, as compared with the situation prior to its commencement;
6. the protection and restoration of biodiversity and ecosystems, if such activity significantly impairs the good condition and resilience of ecosystems or harms the conservation status of habitats and species, including those of Union interest[10] .

In addition to the special causes of exclusion provided for in paragraph 4, paragraph 5 of Article 3 of the draft Decree denies access to the incentives to plants whose construction works have commenced prior to the submission of the application for participation in the same competitive procedures. In this regard, paragraph 6 of the same Article 3 reiterates that the commencement of works coincides with the moment of the first obligation that renders the investment irreversible (e.g. the ordering of equipment or the commencement of construction works, the latter not including the purchase of land and preparatory works such as obtaining permits and carrying out preliminary feasibility studies). In this regard, since this provision is almost identical to the one contained in the Ministerial Decree of 15 September 2022 (setting forth incentives for the production of biomethane), it appears that the interpretation rendered by the GSE in an FAQ following the entry into force of the same Ministerial Decree 15 September 2022 and concerning the date of commencement of the works can also be applied in this context.  In such FAQ, it was clarified, inter alia, that “entering into a supply contract whose validity is subject to the admission in a useful position in a ranking announced by the GSE does not constitute a firm commitment to the construction of the plant”[11].In addition, it should be noted that for the purpose of participating in the competitive procedures, the responsible persons are required to submit a provisional deposit and a final deposit (the terms and conditions for the provision, enforcement and, with specific reference to the provisional deposit, also its amount, will be set forth in the GSE’s operating rules according to Article 10 of the Decree). With specific reference to the final deposit, its amount is set at 10% of the investment cost (as determined by Annex 1 of the draft Decree)[12]. This provision represents an innovation, since the Ministerial Decree of 4 July 2019 (so called “FER 1”), in Article 15, para. 3, establishes that the final deposit is determined to the extent of 10% of the investment cost envisaged for the construction of the plant, “conventionally set at 90% of the costs set forth in Table 1 of Annex 2 of the Decree of 23 June 2016”.For the procedures carried out in 2024, the operating prices to be tendered are those indicated in Annex 1 of the draft Decree, i.e. the same prices indicated for direct access to the support mechanism indicated above. Worthy of mention is also the provision of paragraph 5 of Article 4, pursuant to which the values of the operating prices will be updated, at the time of publication of the individual calls for tenders, by the GSE on a monthly basis, making reference to the national consumer price index for the entire community, in order to take into account the average inflation accumulated between the date of entry into force of the Decree and the month of publication of the call relating to the individual procedure.In the context of participation in the auctions, with equal percentage reductions offered as a result of the application of the coefficients referred to in Article 4, para.8, the following items constitute priority criteria:

a) the complete removal of covering made of asbestos or in any case containing asbestos (only for photovoltaic plants), for which there is also a correction in the award price, see below;b) construction on areas identified as suitable in implementation of Article 20 of Legislative Decree No. 199/2021 (the so-called “Suitable Areas Decree”);c) the presence of an energy storage system at the service of the plant that guarantees at least one daily modulation of the electrical energy, according to the criteria defined in the operating rules set out in Article 10 of the Decree;d) the signing of a long-term power purchase agreement (so-called “Power Purchase Agreement” or “PPA”) with a duration of at least ten years, in the manner provided for in Article 3, para. 9;e) the earliest date of completion of the application for participation in the procedure.

a. 21 months for photovoltaic plants;b. 34 months for wind farms;c. 54 months for hydroelectric plants;d. 54 months for plants treating residual gases from purification processes.[13]

• 19 months for wind farms;
• 39 months for hydroelectric plants;
• 27 months for plants treating residual gases from purification processes.[14]

Failure to comply with the aforementioned deadlines shall entail a 0.2% reduction of the award price for each month of delay for the first nine months, and a 0.5% reduction for the following six months, up to a maximum limit of fifteen months, beyond which the GSE shall declare the forfeiture of the ranking and enforce the final deposit. 

4. Provisions common to all plants

An important novelty included in Article 9, para. 3 of the draft Decree, consists in the updating by the GSE of the award price on the basis of the annual rate of change of consumer prices for factory and office workers’ households surveyed by ISTAT, in order to take into account the inflation recorded:

a) in the period between the date on which the competitive procedure is held and the plant’s expected entry into operation date, with an indexation on 100% of the award price;b) over the term of the contract from the date of the effective entry into operation of the plant, with a partial indexation of the contract price commensurate with the share of the operating and maintenance costs of the plant itself, as defined in the operating rules.

a) payment by the GSE to the producer, starting from the date the plant enters into operation, of an all-inclusive tariff for plants with a capacity not exceeding 200 kW. Consequently, the GSE provides for the withdrawal and sale of the electricity produced, without prejudice to the right of the owners of such plants to adhere to the mechanism referred to in Article 9, para. 1, lett. b (the so-called “two-way contract for difference”);b) payment by the GSE to the producer, as from the date of entry into operation of the plant, of an amount equal to the difference between the auction price determined following the auction procedure and the greater of 0 and the zonal price of electricity, with the producer retaining the availability of the electricity produced and the possibility of exploiting it on the market. If the aforementioned difference is positive, the GSE disburses this difference in the form of a fee; in the event of a negative difference, the GSE equalizes or claims the difference from the producer.

a) plants subject to shutdowns as a result of orders placed by network operators outside the market for dispatching service in order to resolve local grid constraints and/or force majeure;b) zero or negative zonal prices on the Day-Ahead Market, but within the limits of the sum of the program entering the Balancing Market and the power offered at a zero, or negative, price on the Balancing Market;c) plants subject to a production cut as a result of dispatching orders placed by Terna S.p.A. on the Balancing Market and/or European balancing platforms through the acceptance of downward bids that must be submitted at a price no lower than zero[15].

a) capital grants (up to a maximum of 40% of the investment cost) only for newly built plants;b) guarantee funds and revolving funds;c) tax breaks in the form of tax credits or tax relief from business income for investments in machinery and equipment.

i. photovoltaic plants replacing asbestos or eternit (+35 €/MWh);ii. photovoltaic plants realized on roofs if the power of the installation is less than or equal to 1 MW (+10 €/MWh).

5. Large-scale projects

The accelerated assessment procedure for large projects, provided for in Article 6 of the draft Decree, is certainly an element of considerable interest for operators in the sector. This procedure envisages, for plants with a power exceeding 10 MW, the possibility for the proposer[16] to formulate a specific request, together with the application for the single authorization, for the GSE to examine the project electronically in parallel with the preliminary investigation procedure pursuant to Article 5 of Legislative Decree No. 28/2011 and, within 30 days from the date of issuance of the single authorization, to issue the proposer with a qualification of eligibility for the application to access the support mechanism.The consequence for plants with a qualification of eligibility lies in the fact that, should they participate in the first useful tender under the Decree, they are not required to submit the documentation for obtaining the authorization title. The content of this document is for information purposes only and is not and cannot be intended as legal advice on the topics dealt with. For further information please contact Piero Viganò, Giovanni De Luca and Ernesto Rossi. [1] If the realized plants are located on areas affected by constraints that occurred after the construction of the pre-existing plant, reconstruction may only concern the works, infrastructure and buildings that do not fall within the constrained areas.[2] Each has its own section code and “UP” code as identified in Terna’s Gaudì system.[3] For interventions of repowering, access to the support mechanism is allowed only for the new section of plant attributable to the repowering.[4] In this case, the requirement of the obligation to qualify for the provision of dispatching services pursuant to Art. 9, para. 5 (see below) shall be deemed to be met for the total power of the plant.[5] Annex 2 of the draft Decree sets out the specific requirements for access to incentives for each type of plant. With reference to photovoltaic plants, it is specified that photovoltaic plants include agri-voltaic plants (Annex 2, point 3).[6] The “Do No Significant Harm (DNSH)” principle consists in “not causing significant harm” to the environment. In light of Art. 10 of the draft Decree, the operating rules of the Gestore dei Servizi Energetici - GSE S.p.A. (hereinafter the “GSE”) will regulate the construction, performance and environmental protection requirements with which the plants must comply also in order to comply with the DNSH principle and the public notice schemes for each of the procedures foreseen, in accordance with the same principle.[7] This includes photovoltaic plants on agricultural lands pursuant to Article 4-ter, para. 2 of Law Decree No. 181/2023 (the so-called “Energy Decree”), converted by Law No. 11/2024.[8] Art. 3, paras. 2 and 3 of the draft Decree.[9] Regulation (EU) No 241/2021, available at: https://eur-lex.europa.eu/legal-content/IT/TXT/PDF/?uri=CELEX:32021R0241 .[10] Art. 13 of Regulation (EU) No 2020/852, available at: https://eur-lex.europa.eu/legal-content/IT/TXT/PDF/?uri=CELEX:32020R0852 .[11] FAQ published on 21 April 2023 on the Customer Service Portal of the GSE website, available at the following link: https://supportogse.service-now.com/csm?id=faq&sys_id=2f2bc31ec3d2a114ff379b6ce00131d2 .[12] According to Annex 1, point 1 of the Draft Decree, the investment cost is set at:

• 900 €/kW for photovoltaics;
• 1,300 €/kW for wind power;
• 4,800 €/kW for hydro power;
• 7,000 €/kW for residual gases from purification processes.

[13] For installations in the ownership of public administrations, the deadlines are increased by six months.[14] Idem.[15] The provisions of Article 9, para. 6, letters b) and (c) do not apply to plants that are not subject to the obligation to be qualified to provide dispatching services and to plants for which such qualification is not decided. For non-enabled plants with a capacity of more than 200 kW and less than 6 MW, dispatch is suspended during the hours in which prices equal to 0 or negative, where provided for in the Italian electricity market regulation, are recorded on the Day-Ahead Market for a period of more than 6 consecutive hours. Therefore, the period of entitlement to the support mechanism is calculated net of the total hours in which the suspension was recorded (Art. 9, para. 7).[16] It should be noted that, for the purposes of Art. 6, plants owned by local governments, planned and financed under the experimental and innovative measures of the National Recovery and Resilience Plan, are excluded.

• energy-consuming companies will be able to purchase energy from renewable sources “even indirectly”;
• the plants necessary to implement the new generation capacity will have a minimum power of 200 kW (instead of 1 MW).

Secondly, art. 4, para. 2, of the Decree Law, which established an annual contribution for RES-plants holders with power exceeding 20 kW, to be paid for the first 3 years from the entry into operation, if the holders had obtained the permit for the construction of the plant between January 1, 2024, and December 31, 2030, has been removed. This annual contribution, amounting to 10 Euros for each kW of plant power, would have been paid to the GSE and would have sustained a Ministry of Environment and Energy Security’s fund to the benefit of the Regions, to adopt decarbonization measures and promote sustainable territorial development. With the abolition of para. 2, the fund for the Regions under para. 1 is sustained by part of the proceeds from auctions of carbon dioxide emission allowances under art. 23 of Legislative Decree No. 47/2020.Another novelty is represented by the addition of Article 4-bis, through which the scope of application of the environmental impact assessment subjection check (so-called EIA Screening) is extended to interventions, even substantial modifications, for revamping, repowering, and rebuilding of electricity production plants from wind or solar sources.Art. 4-ter, para. 2, of the Decree Law reintroduces, after almost 12 (twelve) years, the possibility of accessing incentive mechanisms provided by Legislative Decree No. 199/2021 (and not also by Ministerial Decree July 4, 2019, so-called “FER 1”) for photovoltaic plants on agricultural land.Art. 4-ter, para. 3, of the Decree Law amends Legislative Decree no. 199/2021, where it prioritizes the participation to incentives of those who carry out refurbishment interventions on existing photovoltaic plants located in agricultural areas and involving the creation of new plants or new plant sections, on the same area and with the same occupied agricultural surface, with an increase in total power.Furthermore, art. 4-septies of the Decree Law introduces Article 7-bis into Legislative Decree no. 199/2021, which states that one or more decrees of the Ministry of Environment and Energy Security shall define the modalities for the establishment of a new incentive mechanism, alternative to those already provided by Articles 6 and 7, aimed at promoting investments in renewable energy production capacity and setting forth a series of principles and criteria (letters a-o).By inserting para. 3-ter into art. 5 of the Decree Law, GSE incentives provided by Ministerial Decree of September 15, 2022, initially restricted, among others, to new biomethane production plants powered by OFMSW, are also extended to plants powered by OFMSW which have undergone conversion.Regarding the development policies for floating wind turbines at sea, art. 8 of the Decree Law has been amended so that the Ministry of Environment and Energy Security shall publish a notice for the acquisition of expressions of interest for the identification, in at least 2 (two) ports in southern Italy or port areas adjacent to those undergoing gradual coal use elimination, of maritime state-owned areas allocated for the construction of infrastructures suitable for ensuring the development of investments in the shipbuilding sector for the production, assembly, and launching of floating platforms, and electrical infrastructures functional to the development of shipbuilding for offshore wind energy production. With the same amendment, the publication of a vademecum by the above Ministry for proponent entities has been stipulated, relating to the minimum information and obligations necessary to initiate the single authorization procedure for offshore wind installations.With para. 9-undecies of art. 9 of the Decree Law, it is stipulated that the start of authorization procedures for RES plants and electrochemical storage systems, including connected works thereof, does not require the technical conformity opinion on the project solutions regarding network systems by the network operator. In any case, such conformity opinion must be acquired during the authorization process for the issuance of the final measure.Moreover, the thresholds for EIA and EIA Screening in suitable areas were raised (to 25 MW and 12 MW, respectively), as well as the threshold for PAS access in suitable areas (up to 12 MW).Finally, art. 12-bis of the Decree Law amends the legislation on the disposal of photovoltaic panels (Legislative Decree No. 49/2014), in that it excludes that the non-correspondence between the reported DEEE serial numbers and those present on-site may constitute a violation relevant for the provision of incentives and, therefore, sanctionable under art. 42 of Legislative Decree No. 28/2011, without prejudice to the obligation for the responsible party to communicate to the GSE any maintenance intervention involving the replacement of photovoltaic modules.Also, on the same subject-matter, it is now provided that, with reference to the retention of the quota for end-of-life management of panels by the GSE, said quota shall be equal to twice the amount based on average costs of joining consortia or costs determined by collective systems.For a complete analysis of the conversion bill text, click here. 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 Viganò, Giovanni Battista De Luca, Ernesto Rossi Scarpa Gregorj and Alessandro Vittoria.

• on the one hand, energy-intensive companies will be able to buy electricity from renewable sources and the related guarantees of origin in advance for a period of 3 (three) years by entering into a two-way contract for difference with respect to a price fixed in advance by the GSE itself (“First Contract”) and against the assumption by the energy-intensive companies of certain undertakings (see below);
• on the other hand, and from the entry into operation of the Plants (as defined below), the energy-intensive companies will enter into a contract for difference with the GSE having as its object the return, for a term of 20 (twenty) years, of the amount of electricity advanced (and the related guarantees of origin) during the period referred to in the preceding point (“Second Contract”).

To be eligible for the Energy Release mechanism as described above, energy-intensive companies will have to commit, at the time of the conclusion of the First Contract, to build additional plants and thus new power generation capacity from renewable sources. Alternatively, energy-intensive companies may undertake to purchase renewable energy from third parties through specific forward purchase agreements (Long-Term Corporate PPAs). In the latter case, energy-intensive companies commit themselves also on behalf of third-party producers to the GSE for the future return of advanced electricity.The new generation capacity may be achieved alternatively through:

• installation of new photovoltaic, wind and hydroelectric plants with a minimum nominal capacity of 1 MW;
• photovoltaic, wind and hydroelectric plants undergoing upgrading or refurbishment allowing for a power increase of at least 1 MW.

 Other requirements/criteriaThe plants through which the new generation capacity is realised shall come into operation within 40 (forty) months from the conclusion of the First Contract, except in cases of force majeure or delays in the authorisation procedures not attributable to the company.The amount of electricity from renewable sources that each energy-intensive company requests in advance shall not exceed, on an annual basis, the average annual consumption qualifying for the registration in the list of energy-intensive companies.In order to return the amount of energy being advanced, the companies may also allocate even only a portion of the capacity of the plant(s) constructed.To secure the obligation to build/purchase new renewable electricity generation, companies will be required to provide appropriate guarantees. Final remarksIt looks as if energy-intensive companies will be called upon to contribute to the development and creation of additional renewable electricity generation capacity, and the mechanism will clearly support the further development of newly emerging Long-Term Corporate PPAs market. In order to have a final picture of the mechanism outlined above and its possible interactions with these agreements and the development of new projects, we must wait for:

• the conversion into law of the Energy Decree;
• the publication of a Ministerial Decree of the MASE determining the “methods and criteria” to access the Energy Release mechanism; and
• the determination by the GSE of the price of the energy to be advanced, which will have to be decided on the basis of the “average efficient cost of producing renewable energy from efficient scale plants using competitive mature technologies”.

 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 Vigano and Ernesto Rossi Scarpa Gregorj

i. applicability of the three-year deadline for the commencement of the construction works under Articole 15, para. 2, of Presidential Decree no. 380/2001 (as amended by Articicle 7-bis of Decree Law no. 50/2022) also to the authorizations under Article 12 of Legislative Decree no. 387/2003;

ii. applicability, also to the authorizations under Article 12 of Legislative Decree no. 387/2003, of the two-year extension under art. 10-septies of Decree Law no. 21/2022 of the deadline for the commencement and end of construction works for authorizations issued or formed by December 31, 2023.

• the minimum area devoted to agricultural activity (≥ 70% of the total area of the agrovoltaic system);
• minimum height of the modules above the ground (1.3 meters for livestock activity, 2.1 meters for crop activity);
• electrical output of the system must be ≥ 60% of the producibility of a standard system.

 Operating Rules and Access to IncentivesThe MASE Decree, in Article 12, provides for the approval of Operating Rules within 15 days of its entry into force. These rules will govern the size and construction of facilities and monitoring systems. Tariffa Incentivante e soggetti beneficiariAnnex 1 of the MASE Decree establishes reference rates for AVs with an increase for those in Central and Northern Regions.The following entities are eligible for the incentives:

• agricultural entrepreneurs as defined in Article 2135[1] of the Italian Civil Code, in individual or corporate form, including cooperatives, agricultural companies, consortia and temporary associations of agricultural enterprises (“Subject A”); or
• temporary associations of enterprises, which include at least one Subject A (“Subject B”).

Plants that meet the access requirements can benefit from the incentive tariff through registration in the registers (only Subject A with power ≤ 1 MW) or participation in competitive procedures (both Subject A and Subject B with any power).Annex 1 defines the reference tariffs (“Reference TI”):

• 93 Euro/MWh for plants with a capacity (P) between 1 kW and 300 kW (1 < P ≤ 300) and
• 85 Euro/MWh for plants with a power (P) greater than 300 kW (P>300)[2].

Regarding access to competitive procedures, participants will have to offer in the application for participation a percentage reduction of the Reference TI of at least (≥) 2% (“Expectant TI”). Regarding the application for registration in the registers this percentage reduction of the Reference TI will not apply[3].Finally, on the nature of the TI, Article 10 of the MASE Decree specifies that for Advanced AV Plants[4] or PNRRs[5] of power not exceeding (≤) 200 kW, the TI takes the form of an all-inclusive tariff and the GSE directly provides for the withdrawal and sale of the energy produced[6]. While, in the case of plants of more than 200 kW, the TI is a premium and the energy produced by the plant remains the property of the producer (see Art. 10, para. 1, letter a).However, one more step is still needed in order to define how to calculate the TI that will actually be disbursed by the GSE (“Erogated TI”). Therefore, several assumptions can be identified:

1. in the case of Advanced AV Plant or PNRR registered and of power (P) ≤ 200 kW, the Erogated TI will be all-inclusive in nature and will be equal to the Reference TI;
2. in the case of Advanced AV Plant or PNRR enrolled in the registries and with power capacity 200 kW < (P) ≤ 1 MW, the Erogated TI will be in the nature of a premium tariff and will be equal to the difference between the Reference TI and the market price of reference electricity;
3. in the case of Advanced AV Plant or PNRR in a useful position following participation in the competitive procedures referred to in Article 6 of the MASE Decree and with a power (P) ≤ 200 kW, the Erogated TI will have an all-inclusive nature and will be equal to the Expected TI; finally
4. in the case of Advanced AV Plant or PNRR in a useful position as a result of participation in the competitive procedures referred to in Article 6 of the MASE Decree and power (P) > 200 kW, the Erogated TI will be in the nature of a premium tariff and will be equal to the difference between the Expectant TI and the market price of reference electricity.

In case the Erogated TI is a premium tariff, the producer remains the owner of the energy produced and will be able to value it in the market, while in case the Erogated TI is an all-inclusive tariff then the GSE directly provides for the withdrawal and sale of the energy. Finally, in case the TI is premium in nature and, therefore, the Erogated TI is calculated as the difference between the Reference TI (or the Expected TI) and the market price of energy, in the case of positive difference, then the GSE disburses the incentives with respect to the production of energy fed into the grid. Otherwise, in the case of a negative difference, the GSE will equalize or claim the corresponding amounts from the incumbent (see Article 10, Paragraph 1(b)). Capital Contribution Eligible expenses, specified in Annex 3, must be paid by bank transfer with receipt by June 30, 2026. The maximum contribution is specified according to the power of the installation, specifically:

• 1,700 Euro/kWh for PNRR AV Plants with a power (P) between 1 kW and 300 kW (1 < P ≤ 300);
• 1,500 Euro/kWh for PNRR AV Installations with a power (P) greater than 300 kW (P > 300).

 Temporary Enterprises Association and Participation in ProceduresThe MASE Decree provides for the temporary enterprises association (“ATI”) of Legislative Decree 36/2023, defining ATI as essential for AVs. The application of ATI in the agrovoltaic context is discussed, highlighting the freedom of legal form and the possibility of participating as “in the process of being established” (costituende). 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 e Stefano Biraghi.  [1] Article 2135 of the Italian Civil Code states, “1. An agricultural entrepreneur is one who engages in one of the following activities: cultivation of the land, silviculture, animal husbandry and related activities. 2. Cultivation of the land, silviculture and animal husbandry shall mean activities directed to the care and development of a biological cycle or a necessary stage of the cycle, of a plant or animal nature, which use or may use the land, forest or fresh, brackish or sea water. 3. In any case, activities, carried out by the same farmer, directed to the handling, preservation, processing, marketing and exploitation that have as their object products obtained predominantly from the cultivation of the fund or forest or from the rearing of animals, as well as activities directed to the provision of goods or services through the prevailing use of equipment or resources of the farm normally used in the agricultural activity exercised, including activities of enhancement of the territory and rural and forest heritage, or reception and hospitality as defined by law, are considered related”.[2] Annex 1 of the MASE Decree does not clearly indicate whether the power output of the plants has MWh or kWh as the unit of measurement; however, given the ranges provided in the MASE Decree and just outlined, it seems more reasonable to support kWh as the reference unit of measurement.[3] See Art. 6, para. 3 MASE Decree.[4] Plants that meets the requirements of A, B, C and D of the June 2022 Guidelines.[5] Facility that meets the requirements of A, B, C, D and E of the June 2022 Guidelines.[6] However, the producing entity may apply for the scheme related to plants with a power exceeding (>) 200 kW.

(i) operate in any of the sectors at risk - including high risk - of relocation listed in Annex 1 to the Communication of the European Commission 2022/C 80/01 of 18 February 2022, «Guidelines on State aid for climate, environmental protection and energy 2022» (“Communication”);(ii) despite not operating in any of said sectors, have benefited, in the years 2022 or 2023, of the allowances under the Decree of the Minister of Public Development of 21 December 2017, «Provisions on tariff reductions to cover general system charges for energy-intensive companies», having met the requirements under article 3, paragraph 1, a) or b), of the same decree;(iii) despite not operating in any of said sectors under (i) and despite not meeting the requirement under (ii), operate in a sector or subsector deemed eligible under point 406 of the Communication. In such case, the deadlines and terms for the submission - by the companies or the trade associations concerned - of the proposal for admission of the sector or subsector shall be set out by decree of the Ministry of the Environment and Energy Security.

• for the purpose of the determination of the Allowance the “electric intensity index” under former Ministerial Decree of 21 December 2017 is no longer relevant, but only the “gross added value” of the company is relevant (“GAV”);
• the quantum of the Allowances has increased, compared to other companies, for some of the energy-intensive companies that meet their energy consumption needs from “sources that do not emit carbon” by at least 50%, of which:
  • at least 10% through a “forward purchase agreement”; or
  • at least 5% through self-consumption by means of a direct on-site or remote connection[2];
• as an alternative to performing the obligations in the energy audit (to which all energy-intensive companies are obliged in any event), they may:
  • prove that they cover their needs from “sources that do not emit carbon” by at least 30%;
  • invest at least 50% of the allowance amount in projects involving substantial reductions in greenhouse gas emissions (see below for further details).

 With respect to the determination of the Allowance, the new state of the art is summarised in the following table:[3]There is a favourable approach to those companies that take steps to consume energy from “sources that do not emit carbon”. In this regard, it is believed that this notion should refer to all those sources of electricity production that do not lead to an increase in the amount of carbon dioxide in the atmosphere, even if the production of energy involves the emission of carbon. In other words, those sources of electricity production that, while producing carbon emissions, do not use fossil fuels and are, therefore, neutral with respect to the amount of carbon dioxide must also be included. The meaning of “purchase agreement”By using the expression “forward purchase agreement”, we believe that lawmakers want to refer to power purchase agreements (“PPAs”), but it is worth noting that there are certain interpretative difficulties. On the one hand, the expression “forward” might suggest a PPA without physical delivery of the energy produced, but, on the other hand, the expression “purchase” leads one to refer to PPAs with physical delivery. It could be assumed that by the expression “forward”, therefore, lawmakers intended to refer to the category of long-term PPAs, but without indicating a minimum duration, and that “purchase” implies the physical delivery of electricity produced even from existing plants, since it does not have to derive from new plants. The measure would therefore not necessarily have the effect of favouring the installation of additional electricity generation capacity from renewable sources.It is also noted that the rule only refers to certain particular configurations of self-consumption and, in particular, those that exclude the use of the public distribution network[4]. continued: the energy audit - coordination issuesAs already mentioned, companies accessing the Allowances must carry out an energy audit[5] and are required to adopt either of the following measures:

• implement the recommendations of the audits, if the amortisation time of the investments required for such purpose is no longer than three years and the related cost is no higher than the amount of the allowance received;
• prove that they cover their needs from “non-carbon emitting sources” for at least 30%; or
• invest at least 50 per cent of the amount of the allowance in question in projects leading to substantial reductions in greenhouse gas emissions (see below for more details).

Apparently, according to the new rules, the implementation of the recommendations referred to in the energy audit is an alternative to the other two measures listed above. In fact, the use of the expression “recommendations of the audit” in Decree Law No. 131/2023, does not strictly reflect the specific rule concerning the content of the energy audit, which provides that such document must specify a series of energy “efficiency measures” to be implemented[6]. Therefore, lawmakers should intervene in order to clarify: (i) whether or not recommendations refer to the energy efficiency measures outlined in said energy audit; and (ii) whether or not the implementation of any of the measures outlined in the energy audit is still an obligation, or whether it is an alternative to the implementation of any of the other two new measures set out by the 2023 lawmakers. Indeed, if by “recommendations” lawmakers were to refer to energy efficiency measures, the implementation of said measures would be an alternative to the implementation of any of the other two new measures outlined by the 2023 lawmakers. Otherwise, it should be necessary to clarify the meaning of recommendations in order to coordinate the obligations resulting from the energy audit with the two different measures proposed by the 2023 lawmakers.With reference to the implementation of the audits, it should be noted that access to the incentive mechanism of energy efficiency certificates[7] (or white certificates) is subject, inter alia, to the verification of the existence of the condition of the so-called additionality of energy efficiency measures, whereby “energy efficiency projects designed to comply with regulatory constraints or administrative requirements are not eligible for the White Certificates system, except in the case of projects generating additional savings when compared to the design solutions specified by the aforementioned constraints or requirements and projects implemented pursuant to Article 8, paragraph 3 of Legislative Decree No. 102 of 4 July 2014 that generate additional savings”[8]. Therefore, given the regulatory obligation to implement the measures, such measures, if implemented, will not be eligible for the incentive mechanism insofar as they do not generate additional savings.With reference to the first of the alternatives to implementing the recommendations contained in the energy audit, it seems clear that lawmakers are referring to the aforementioned PPAs and to self-consumption configurations whose production plant, even in cogeneration mode, is from renewable sources.As for self-consumption, it should be pointed out that lawmakers did not limit the specific case at issue to self-consumption configurations that do not involve the use of the public distribution network.Finally, the last alternative to the implementation of the recommendations of the energy audit introduces for the first time the possibility of fulfilling the obligations typical of energy companies through the investment in projects to reduce greenhouse gas emissions whose value of emission reduction subtracted from the emissions actually produced by the company leads to a level lower than that determined at the European Union level[9], for each sector, for the free allocation of emission allowances (so-called EU Allowances).In other words, an energy-intensive company can fulfil its obligations to access the relevant Allowances by proving that it has invested in one or more projects that lead to a certain level of greenhouse gas reduction to be determined on the basis of the company’s type and size (in terms of emissions). Final remarksIn any event, in order to have a final text of the provisions examined, it is necessary to wait for: (i) the conclusion of the parliamentary work for the conversion into law of Decree Law No. 131/2023, which must be completed by the end of November 2023; and (ii) the publication of a Ministerial Decree of the MASE (Ministry of the Environment and Energy Security) whereby the “methods and criteria” for the fulfilment of the conditions and the fulfilment of the obligations referred to above will be determined. 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 the Energy and Infrastructures Department [1] As to the classification of the state of difficulty see the European Commission’s Communication 2014/C, 249/01.[2] Article 30, paragraph 1, a), Nos. 1 and 2.1, Legislative Decree No. 199/2021 and Article. 3.6, Resolution ARERA No. 727/2022 and Annex A to ARERA Resolution 578/2013.[3] In any case, the contributions owed by energy-intensive companies may not be less than the product of 0.5 Euro/MWh and the electricity taken from the public grid.[4] Reference is made, in particular, to the configurations under Article 30, paragraph 1, a), Nos. 1 and 2.1, of Legislative Decree No. 199/2021.[5] Article 8 of Legislative Decree No. 102/2014.[6] Article 8, paragraph 3, of Legislative Decree No 102/2014.[7] Ministerial Decree of 11 January 2017.[8] Article 6, paragraph 6, of Ministerial Decree of 11 January 2017.[9] Commission implementing Regulation (EU) 2021/447 of 12 March 2021.

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; andc) 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.

• the creditor is contractually protected by the guarantee represented by all assets of the debtors and not by self-protection measures considered illegitimate, except for those provided by the articles 1460 and 1461 ItCC;
• current situations of default by a weak contracting party towards the monopolist (Terna) justify both the automatic termination of the contract and the refusal by the monopolist to enter into a new contract; but
• a situation of composition with creditors with business continuity is not comparable to a situation of current default towards Terna.

Why is it important? The ruling of the TAR is relevant for two main reasons:

• (i) In relation to the possible incompatibility of the composition with creditors with the amendments introduced by ARERA Resolution, the Ruling protects market operators similar to the Claimant in this period of strong economic uncertainty, avoiding the exclusion from the market of potentially recoverable companies burdened by economic difficulties and unfavorable and unlawful provisions.
• (ii) In relation to the creditor self-protection (autotutela creditoria), the ruling provides a rigorous legal reasoning that could be applied in other judicial proceedings concerning the other amendments introduced by ARERA Resolution on the Grid Code. An example is the ongoing proceeding before the TAR regarding the power of Terna to terminate the Contracts of Dispatchment or refuse to enter into new ones with companies whose director is “in common with companies in default of payment obligations towards Terna or with companies that have been parties to a contract of dispatchment with Terna terminated for non-compliance” (chapter 4, point 4.3.1.2, letter (iii) of the Grid Code). The supervision order (ordinanza cautelare) of the TAR (no. 2178/2021) considered this modification potentially harmful.

As can be noted on the basis of the aforementioned Preliminary Order (No. 2178/2021), the TAR Lombardy Ruling has broader implications than those pertaining to the individual case examined offering a legal framework that could influence future proceedings regarding other amendments introduced by the ARERA Resolution. In this sense, the Judgment provides the basis for further intervening proceedings aimed at protecting market players such as the Applicant in a beyond uncertain economic environment.