The final FER-X decree: the new quotas and the main changes compared to the transitional regime

1. Premises 

On June 18th, the Minister of the Environment and Energy Security ("MASE") signed the long-awaited decree aimed at regulating the incentive mechanism now known as "FER-X" and dedicated to the production of electricity from renewable plants  with generation costs close to market competitiveness (the "Final FER-X Decree").

The measure follows the European Commission's decision of 8 June 2026, by which the measure was declared compatible with the internal market under state aid rules.

The most relevant data, on a systematic level, concerns the change of legal basis compared to the previous transitional regime introduced by the MASE decree of 30 December 2024 ("Transitional FER-X Decree" or "Transitional FER-X"): the latter, in fact, had been adopted as part of an emergency and crisis framework applicable only to aid granted by 31 December 2025 and aimed at dealing with the consequences deriving from the Russian-Ukrainian conflict.

The FER-X Final Decree, on the other hand, is based on the Guidelines for State aid measures in support of the Pact for Clean Industry, adopted by the European Commission on 25 June 2025 and applicable to aid granted by 31 December 2030.

The new regime, therefore, is no longer presented as  an emergency bridging measure, but as a structural tool to support the energy transition, consistent with the objectives of the Clean Industrial Deal and the Net-Zero Industry Act.

According to the European Commission at the time of the approval of the measure, the scheme has a total budget of 23 billion euros and is expected to support the construction of about 37.15 GW of new renewable capacity, equal to about 48% of the RES capacity currently installed in Italy, contributing to the achievement of the national target of 39.4% of gross final consumption of energy from renewable sources by 2030.

2. The Support Mechanism

In its basic architecture, the FER-X Final Decree replicates the already known model introduced by the transitional regime, supporting the construction of photovoltaic, wind, hydroelectric and gas-fired  plants powered by residual gases from purification processes, including the hypotheses of new construction, complete refurbishment, partial renovation and upgrading of existing plants (for the latter, limited to the new section of the plant attributable to the intervention).

Access to the mechanism continues to be divided into two directions, depending on the power of the plant:

(i) direct access for plants with a capacity of less than or equal to 1 MW that have started work after the entry into force of the decree and to which an award price is assigned administratively set by ARERA;

(ii) access through competitive procedures (downward auctions announced by  the GSE) for plants with a capacity of more than 1 MW, with power quotas distinguished by technology and whose award price is determined on the basis of the discount offered by competitors on the higher exercise price.

The support continues to be provided, except for plants with a capacity of less than 200 kW (all-inclusive tariff), through a two-way contract for difference: if the market reference price is lower than the award price, the GSE pays the difference to the producer; conversely, if the market price is higher, the producer returns the difference to the system.

The duration of the contracts and, therefore, the period of maintenance of the incentives also remains unchanged (i.e., 20 years from the date of entry into operation of the relevant plant).

Finally, there is no news even with regard to strike prices.

3. The main changes compared to the Transitional FER-X Decree

The innovations introduced by the Final FER-X Decree compared to the previous incentive scheme mainly concern the architecture of the quotas, the selection procedures and some safeguards to protect the system.

3.1 Duration and total quotas

The Final FER-X Decree significantly expands the time and size horizon of the mechanism.

In fact:

• the validity of the measure is extended from 31 December 2025 (end of the transitional regime) to 31 December 2030;

• the power quota for plants with a capacity of less than or equal to 1 MW (and, therefore, eligible for direct access to the incentive) rises from 3 GW to 10 GW;

• the total estimated quota for competitive procedures (i.e., for plants with a capacity of more than 1 MW) increases from 14.65 GW to 27.15 GW, thus bringing the total allocation of the mechanism (direct access and competitive procedures) from the previous 17.65 GW to the current 37.15 GW.

3.2 Quota allocation: more space for wind energy

The increase in the quota allocated to competitive procedures is not evenly distributed among technologies, but is almost entirely attributable to wind power.

While the quota reserved for photovoltaic (10 GW), hydroelectric (0.63 GW) and sewage gases (0.02 GW) is not changed, on the other hand, the quota reserved for wind power goes from the previous 4 GW to the current 16.5 GW.

The decree does not illustrate, in the premises, the basis of this redistribution and, on this point, more clarifications could be contained in the implementing decree of the MASE, to be adopted within 60 days of the entry into force of the Final FER-X Decree, in order to regulate the methodology for calculating the minimum and maximum target power quota.

In this regard, it should be noted that this implementing decree will have to take into account, among other elements, the expected evolution of electricity demand, the regional breakdown of national objectives, the evolution of the transmission grid and  storage resources: criteria that the transitional regime did not expressly refer to among those relevant for the definition of quotas.

3.3 NZIA procedures

Article 6 of the Final FER-X Decree provides for ad hoc competitive procedures for photovoltaic and wind power plants with a capacity of more than 1 MW, in implementation of the now well-known Net-Zero Industry Act referred to in Regulation (EU) 2024/1735 ("NZIA").

Pursuant to the Final FER-X Decree, a share equal to at least 30% of the maximum quota that can be procured for photovoltaic and wind power, during the year in which the procedure is announced, must be allocated through these procedures on the basis of which, in addition to the price, the following pre-selection and "non-price" award criteria are also relevant for the award: 

(i) responsible corporate conduct, in terms of sustainability due diligence;

(ii) cybersecurity and data security, including the maintenance of operational control of the facility by an operator established in the European Economic Area;

(iii) the ability to carry out the project completely and on schedule;

(iv) the auction's contribution to resilience;

(v) the contribution of the auction to sustainability, through scores attributed to the presence of power storage systems equal to at least 25% of the nominal power.

As regards the criterion set out in point (iv), it is specified that – if the Commission, pursuant to Article 29(2) of the Net Zero Industry Act, has established that more than 50% of the supply within the Union of final products or their main specific components originates from a single third country, or that the supply within the Union of final products or their main specific components originating in a single third country has increased on average by at least 10 percentage points for two consecutive years and reaches at least 40% of the supply within the Union – it is necessary that the products/components of the relevant installations are not assembled or originated in that third country (e.g., photovoltaic modules and cells, inverters, turbines, powertrains, etc.).

In short, unlike the transitional regime, the direct reference to China is eliminated  by using a more generic reference to "third countries" and it is expected that the possible application of this criterion derives from a specific assessment by the Commission aimed at verifying the European dependency rate in terms of imports of certain products/components with the aim of making the EU (and, therefore, Italy) less vulnerable to potential supply risks.

Compared to the previous version, a greater articulation of the NZIA mechanism has been introduced, with the aim of transposing into the national law the need to combine auctions based exclusively on price with procedures that enhance the resilience of the European supply chain and the industrial quality of projects.

3.4 Competitive procedures and preliminary qualification

The procedure for access to competitive procedures is also restructured: if in the transitional regime the operator submitted a single application for participation, including the documentation certifying the possession of the requirements, within a window of sixty days, with publication of the ranking within the following ninety days, the Final FER-X Decree instead breaks down the procedure into two distinct phases: the first, consisting of a preliminary qualification, in which the GSE verifies in advance the possession of the subjective requirements and any priority criteria, and a subsequent tender phase, in which only the already qualified entity submits the economic offer. Precisely because of this anticipation of the documentary checks, the time of the competitive phase is significantly reduced : the window for the submission of the application for participation cannot exceed ten days and the ranking must be published within the following ten working days.

In line with this acceleration, the rules on sureties are also being reviewed. The provisional deposit, equal to 5% of the investment cost (a percentage substantially in line with that already deducible from the transitional regime, where it was set at 50% of the final deposit), must now be paid already at the time of  the expression of interest, rather than at the time of the application for participation; the deadline for payment of the final deposit, equal to 10% of the investment cost calculated on the power admitted in the ranking, it is reduced from ninety to thirty days from the publication of the ranking with a positive outcome. The specific investment costs used for the calculation, shown in Table 2 of Annex 1, remain unchanged for all technologies (900 €/kW photovoltaic, 1,420 €/kW wind, 3,160 €/kW hydroelectric, 3,500 €/kW sewage gas).

In addition:

• the deadline for the adoption of the  operating rules implementing the mechanism is reduced from ninety to sixty days; the expressions of interest already submitted pursuant to the Transitional FER-X Decree, moreover, are expressly calculated within the maximum limit of three manifestations per plant also provided for by the new decree, thus ensuring continuity with the previous regime;

• the provision, present in the transitional regime, which expressly guaranteed the performance of at least two competitive procedures per year, is no longer applicable: the Final FER-X Decree merely requires compliance with the conditions of competition of the procedures, entirely deferring the definition of the related calendar to the operating rules.

Finally, the transitional regime provided for a uniform term of 36 months, starting from the publication of the ranking, for the entry into operation of all plants admitted through the competitive procedure, regardless of technology.

In this regard, the Final FER-X Decree introduces, on the other hand, differentiated terms by type of plant and category of intervention.

The penalties on the tariff in the event of delay (0.2% per month for the first nine months of delay, 0.5% per month for the following six) and the consequences of forfeiture of the ranking remain substantially similar to those of the transitional regime.

3.5 Rental signs and entry requirements for photovoltaics

The transitional regime provided, for photovoltaics only, a fixed correction of the award price according to the geographical area (+4 €/MWh for the Central regions, +10 €/MWh for those in the North), designed to compensate for the different levels of insolation. The Final FER-X Decree eliminates this fixed correction from Annex 1 and replaces it with a mechanism of rental signals integrated directly into the ranking algorithm: the Ministry, with the support of Terna and the GSE, will define specific coefficients for each market area, to be applied to price reduction offers before they are ranked in ascending order (Articles 7 and 8). It is a technologically neutral mechanism, applicable to all sources and no longer reserved only for photovoltaics, designed to provide signals consistent with the expected development of the electricity grid.

In terms of access requirements, the FER-X Final Decree also introduces a specific tightening for photovoltaics: while in the transitional regime all technologies could, at the request of the producer, participate in competitive procedures by presenting only the environmental impact assessment measure instead of the enabling title, the new decree reserves this faculty only to technologies other than photovoltaics. For photovoltaic systems, therefore, the possession of the building and operation permit remains necessary. The premises of the decree motivate the choice with reference to the large number of photovoltaic projects that have already completed the enabling process, to which it was intended to give priority access to the mechanism.

3.6 Early withdrawal, dispatching and other changes

Finally, the Final FER-X Decree strengthens some safeguards to protect the system. In the event of undue early termination of the contract, the penalty due to GSE is no longer calculated according to the proportional criterion already provided for by the transitional regime (increasing according to power, decreasing according to the remaining period, up to a limit of 20% of the standard investment cost), but corresponds to the greater of this amount and a new value commensurate with any overcompensation which the producer would obtain by exiting the contract in a context of expected market prices higher than the award price, calculated on the basis of the best available estimates of forward energy prices increased by 20%. The provision is clearly designed to discourage opportunistic withdrawals motivated by market price developments.

On the dispatching front, the new decree introduces a mechanism not present in the transitional regime, aimed at preventing plants from being incentivized to maximize production in the absence of a real system need and to prevent overgeneration phenomena: when the price of the Day-Ahead Market is significantly higher than that recorded in the most liquid sessions of the Intraday Market, the producer is required to offer  the excess quantities on the Balancing Market at a price equal to its variable cost, with suspension of differential regulation for these volumes. Specific rules are also introduced for scheduled maintenance periods and for cases of zero or negative prices on the Intraday Market in the presence of positive prices on the Day-Ahead Market.

Other significant changes include:

(i) the possibility, for all categories of intervention, to use regenerated components and not just new ones (Annex 4);

(ii) the doubling of the correction of the award price for plants built on bodies of water, from +5 to +10 €/MWh (Annex 1);

(iii) the redefinition of the notion of "newly built plant", no longer anchored to a period of absence on site of at least five years, but to the non-reuse of components, infrastructures or works of a pre-existing plant, except for regenerated (Annex 4);

(iv) the elimination, among the priority criteria applicable in the event of surplus applications, of the removal of eternit or asbestos roofs  and the presence of storage systems: the first profile continues to benefit from the tariff increase of +27 €/MWh, while the second is now included, albeit limited to the procedures dedicated to the Net-Zero Industry Act,  among the award criteria related to sustainability;

(v) the support, among the priority criteria related to location, of the new "acceleration zones" identified pursuant to Articles 11-bis and 12 of Legislative Decree No. 190 of 2024 (as amended by Legislative Decree No. 178 of 2025) to the "suitable areas", which in the transitional regime constituted the only relevant location reference;

(vi) for hydroelectric plants, the replacement of the verification of compliance with the Guidelines on water diversions, previously conducted by the National System for Environmental Protection (SNPA) through a dedicated investigation, with a verification carried out directly by the concessionaire authority at the request of the concessionaire (Annex 3).

4. Preliminary considerations and next steps

The main strategic innovation of the Final FER-X Decree is the decision to concentrate almost entirely the increase in quotas on wind technologies, whose ceiling in competitive procedures increases from 4 GW to 16.5 GW, absorbing about 74% of the entire increase in capacity allocated to auctions.

This choice appears to be consistent with the objectives of diversifying the national electricity mix and with the need, repeatedly highlighted by Terna and the energy planning scenarios, to combine the strong growth of photovoltaics with a source characterized by a more complementary production profile, especially in the evening and winter months.

However, the Decree does not provide an explicit justification for the technical and systemic reasons that led to this reallocation of quotas, effectively postponing the definition of the calculation methodology to subsequent implementing measures.

From an operational point of view, there is also a potential criticality linked to the market's effective capacity to absorb and realize, by 2030, such a significant volume of new wind capacity. Although the authorisation framework has improved significantly in recent years, there are still elements of uncertainty related to permitting times, territorial opposition, landscape constraints and the availability of the transmission grid in the areas most suited to wind development.

A further element of attention concerns the interaction between the new wind quota and the NZIA procedures. The reservation of at least 30% of annual volumes for procedures that enhance industrial resilience criteria and the origin of components could favor the European supply chain of turbines and main components, but at the same time risks leading to an increase in investment costs and a reduction in competition in the early stages of application, especially in the absence of a European production capacity fully adequate to the expected demand.

Finally, the success of the incentive scheme will depend significantly on the ability of the legislator and the competent administrations to coordinate the development of wind generation with that of grid infrastructures and storage systems. The same decree expressly recognises that the definition of future quotas will have to take into account the evolution of electricity demand, the transmission grid and storage resources, highlighting how the issue of integration into the electricity system today represents one of the main challenges for the growth of renewable sources.

Ultimately, the Final FER-X marks a paradigm shift with respect to the transitional regime: from a measure mainly aimed at supporting renewable capacity in a general sense to an instrument that identifies wind power as one of the cornerstones of the national decarbonisation strategy. However, it remains to be seen whether the ambition of the new quotas will be adequately reflected in the country's authorization, industrial and infrastructural capacity, elements that will represent the real test of the new mechanism in the 2026-2030 period.

In order to have a clear, complete and exhaustive picture of the future new regulations (and the consequent reactions of market players), it will still be necessary to wait for the entry into force of the legislation and subsequent implementing measures.

The FER-X Decree has been transmitted to the Court of Auditors and is expected to enter into force in the coming days. It is now a matter of waiting for the detailed regulations and, specifically:

• the GSE's operating rules, which should be published and approved by the MASE within 60 days of the entry into force of the Decree;

• the MASE decree, to be adopted within 60 days of the entry into force of the Final FER-X Decree, aimed at regulating:

• the distribution over time of quotas by technology and procedure;

• the coefficients for each market area;

• the methodology for calculating minimum, target and maximum contingent.

• the definition by ARERA, within 90 days of the entry into force of the decree, of the award prices for plants with a capacity of less than or equal to 1 MW.

Based on the provisions of the FER-X Decree, the GSE should publish the notice to submit requests for preliminary qualification within 30 days of the publication of the operating rules, as a result it is very likely that the "new" incentive mechanism will get to the heart of the matter starting from September/October 2026.