Italy to launch offshore renewable energy Contract for Difference auction 

Italy is set to launch a Contract for Difference (CfD) auction scheme through which the government will select and support renewable energy projects, including floating solar, tidal, and wave energy.

EU flag; Courtesy of the European Commission; Credit: Mauro Bottaro

Italy plans to introduce a €35.5 billion scheme to support renewable electricity production until 31 December 2028, financed by a levy on consumers’ electricity bills, and award CfDs for up to 4,590 MW of projects.

Under the scheme, aid will be provided as a two-way CfD for each kWh of electricity produced and fed into the grid, which will be paid for a duration equal to the useful life of the plants. 

Projects will be selected through a transparent bidding process based on the incentive tariff (strike price) required for each project. The reference price for electricity will be the hourly zonal price, which is the market price at the time and location where the energy is fed into the grid.

The scheme will support new plants using, aside from the above-mentioned marine energy technologies, geothermal, offshore wind, thermodynamic solar, biogas, and biomass energy. The deadlines for the selected projects to enter operation will range from 31 to 60 months, depending on the technology.

The European Commission has now approved the Italian scheme under EU State aid rules, saying the scheme aligns with the EU’s European Green Deal and the REPowerEU Plan objectives and aims to reduce dependence on Russian fossil fuels while accelerating the green transition.

“This scheme enables Italy to support the production of renewable electricity from various technologies, including innovative ones. The measure helps Italy meet its emission reduction and electricity production targets. It will also contribute to achieving the European Green Deal objectives, while limiting possible distortions of competition,” said Margrethe Vestager, European Commission’s Executive Vice-President in charge of competition policy.

In May 2024, the European Commission’s EU Blue Champions scheme unveiled three winning companies coming from the marine energy sector – France’s Hydroquest, Spain’s EnerOcean, and Germany’s SCHOTTEL Marine Technologies. 

These marine energy companies won advisory support to grow their business, among the 20 selected EU Blue Champions.

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