On December 9, 2023 Law Decree No. 181 concerning “Urgent provisions for the energy security, the promotion of the use of renewable energy, support for energy-intensive businesses and reconstruction in the territories affected by the exceptional flooding events that occurred on or after 1 May 2023” was issued and published in the Official Gazette of December 9, 2023, no. 287. It entered into force on December 10, 2023 (the “Decree 181/2023”).

The Decree 181/2023 regards the following matters:

1. Measures to promote self-production of renewable energy in energy-intensive sectors at risk of relocation through the sale of renewable energy at fair prices;
2. Measures for natural gas supply, concessions and allocation procedures;
3. Geothermal concessions;
4. Incentives for Regions in relation to renewable energy plants;
5. Measures on non-enabled plants fuelled by sustainable bioliquids;
6. Measures for the development of the supply chain for offshore wind plants;
7. Authorization simplifications for primary substations and power lines;
8. Register of PV Plants;
9. Provisions on competitive procedures and protection of domestic customers.

Di seguito si illustra una sintesi delle disposizioni.

1. Measures to promote self-production of renewable energy

Measures to promote self-production of renewable energy in energy-intensive sectors at risk of relocation through the sale of renewable energy at fair prices – Art. 1 of Decree 181/2023

1.1. Concessions to electricity-intensive companies by public authorities.

Until December 31 2030, in the event that several competing applications are submitted for the concession of the same surface area, the Authorities shall favour projects for photovoltaic (“PV”) or wind plants aimed at satisfying the energy needs of companies registered in the list of energy-intensive companiesestablished at the so-called “Cassa per i Servizi Energetici e Ambientali” (“CSEA” and “CSEA Companies”).

1.2 Mechanism for the creation of new energy generation capacity from renewable sources

Within 60 days from the date of entry into force of Decree 181/2023, the Minister for the Environment and Energy Security (the “MASE”) shall define a mechanism to support the creation of new energy generation capacity from renewable sources (i.e. renewable energy sources plants, “FER Plants”) by CSEA Companies, based on the following criteria:

• new energy generation capacity must be realized through:
  1) new PV, wind and hydroelectric plants with a capacity of at least 1 MW;
  2) PV, wind and hydroelectric plants whose empowerment or refurbishment resulted in an increase of capacity of at least 1 MW;
• FER Plants must entry into operation within 40 months from the signing of the energy supply agreement (notwithstanding force majeure events or delays in administrative procedures for the construction of FER Plants not attributable to the CSEA Company);
• pending the entry into operation of FER Plants, CSEA Companies may request the Energy Services Manager (“GSE”)
  to advance, for a period of 36 months, a portion of the quantities of renewable energy and the related guarantees of origin(“GO”), through contracts for difference (“CFD”)^[1].

2. Measures for natural gas supply

Concessions and allocation procedures – Art. 2 Decree 181/2023

2.1 Concessions

Within 30 days from the date of entry into force of Decree 181/2023, the GSE must initiate procedures for the long-term supply of natural gas at reasonable prices by means of an invitation to the holders of concessions whose natural gas production plants are located in suitable areas^[2] according to the Plan for the Sustainable Energy Transition of Eligible Areas (“PITESAI”).

In addition, the cultivation of natural gas is also permitted on the basis of existing concessions or new concessions in the stretch of sea between the 45th parallel and the parallel distant 40 kilometres south of the latter and at least 9 nautical miles from the coastlines and in sea areas between 9 and 12 nautical miles from the coastlines along the entire national coastal perimeter or in sea areas between 9 and 12 nautical miles. The holders/applicants of the aforementioned concessions shall submit to the GSE the expression of interest, communicating: the incremental programmes of natural gas production for the useful life of the reservoir, a list of possible developments, increases or restorations of natural gas production, the maximum timeframe for entry into supply, the expected production profile and the relevant necessary investments. Further to the expression of interest, a single procedure is carried out according to Law No. 241 of 7 August 1990 (the “Law 241/1990”)^[3]. Such single procedure includes the environmental procedures referred to in Legislative Decree No. 152 of 2006 (the so-called “Environmental Code”) and must be concluded within 3 months from the submission of the expression of interest.

2.2 Allocazioni

At the end of the above mentioned single procedure, the GSE, by means of allocation procedures, offers the natural gas rights, on a priority basis, to industrial end customers with high gas consumption, entitled to the facilities^[4].

3. Geotermal concession

Art. 3 Decree 181/2023

Concerning concessions for the cultivation of geothermal resources (the “Cultivation concession”), the outgoing concessionaire must submit, within June 30, 2024, a multi-year investment plan, regarding:

• maintenance and technological improvements to operating Plants, including those aimed at reducing emissions;
• mining interventions to recover the natural decline of the geothermal field;
• interventions for environmental sustainability, including measures aimed at protecting and restoring the environment of the territories affected by the Cultivation concessions;
• measures for the construction of new Plants or for the empowerment of existing Plants;
• measures to increase employment levels in the territories affected by the Cultivation concession.

The competent authority examines and decides on the plan. If the plan is not submitted, or in the event of a negative outcome of the authority’s assessment, the authority proceeds to reallocate the Cultivation concession.

4. Incentives for Regions

In relation to renewable energy plants – Art. 4 Decree 181/2023

MASE establishes a fund for the Regions for the adoption of decarbonisation and promotion of sustainable territorial development measures (the “Regions Fund”).

The resources of the Regions Fund will come from:

• a share of the proceeds of the auctions of carbon dioxide emission quotas.^[5]
• an annual contribution paid to the GSE by the owners of FER Plants having a capacity higher than 20 kW, whose qualifying titles have been obtained between 1 January 2024 and 31 December 2030. This annual contribution is equal to 10 euros for each kilowatt of capacity of the Plant for the first three years from the date of entry into operation.^[6]

GSE will provide for the activities necessary for the operation of the aforesaid measures, which will be regulated by a special agreement signed with the MASE.
Furthermore, the modalities and criteria for the distribution of the Regions Fund among the Regions are established through a decree issued by MASE.

5. Measures on non-enabled plants fuelled by sustainable bioliquids

Art. 5 Decree 181/2023

A mechanism for the contractualization of production capacity fuelled by sustainable bioliquids is established (the “Mechanism”):

• which comply with the requirements and conditions set forth in Artt. 40 and 42 of Legislative Decree No. 199 of 8 November 2021 (“LD 199/2021”) and
• whose Plants are already in operation at the date of entry into force of Decree 181/2023.

The Mechanism takes into account (also in terms of the minimum number of operating hours of the Plants): the logistics, supply, storage and management of primary energy,
the needs for efficient maintenance of the Plants to ensure their contribution to the flexibility of the electricity system. Within 120 days from the date of entry into force of Decree 181/2023, the criteria, terms, conditions for the implementation of the Mechanism by Terna S.p.A. and the relevant model contracts.

From the date of entry into force of Decree 181/2023 until the date on which the Mechanism becomes operational (however no later than 31 December 2024), the minimum guaranteed prices defined by ARERA shall apply to the above mentioned Plants. Within 60 days from the date of entry into force of Decree 181/2023, ARERA shall adopt the relevant measures.

6. Measures for the development of the supply chain for offshore wind plants

Art. 8 Decree 181/2023

MASE shall publish a notice for the acquisition of expressions of interest for the identification, in two ports in Southern Italy part of the Port System Authorities^[7], of maritime state-owned areas
with related water surfaces for the construction of infrastructures for off-shore wind Plants, in compliance with the applicable urban planning instruments.

Within 120 days from the expiry of the deadline for the submission of expressions of interest, a decree of MASE identifies:

• the above-mentioned maritime state-owned areas;
• the infrastructural interventions to be carried out in the above-mentioned state-owned areas, also on the basis of a technical-economic feasibility analysis and the timeframe for the implementation of the said interventions;
• the financing modalities of the identified interventions.

7. Authorization simplifications for primary substations and power lines

Art. 9 Decree 181/2023

Until December 31 2026 – and without prejudice to the application of more favourable regimes at the regional level – primary substations and power lines, without extension limits and up to 30 kV, envisaged within the framework of projects eligible for funding under Investment 2.1, Component 2, Mission 2, of the National Recovery and Resilience Plan, as well as the construction of ancillary works indispensable for the implementation of such projects, are authorized as follows:

• Declaration of start of works: such interventions are authorized by means of a declaration of start of works (“DIL”) submitted to the competent Regions or Autonomous Provinces at least 30 days before the actual start of works, provided that: (i) there are no environmental, landscape, cultural or EU regulatory constraints; (ii) the consent of the owners of the related areas is obtained.
  DIL is submitted along with (i) the final project; (ii) a report certifying the absence of constraints, the conformity and compatibility of the works and infrastructures with the approved urban planning instruments and the building regulations in force and, where necessary, compliance with the regulations on electromagnetism for the protection of the population from exposure to electric, magnetic and electromagnetic fields, on the management of excavated earth and rocks and on the design, construction and operation of power lines and the technical standards for construction.
• Single authorization: in case the aforementioned constraints exist or in case the acquisition of the declaration of public utility or the authorization for a variant to the existing urban planning instruments is required, such works are authorized with a single authorization (“AU”). More precisely, within 5 days from the date of submission of the AU application, the proceeding administration adopts the instrument of the Steering dall’istanza. Committee referred to in Article 14-bis of Law 241/1990, with the following variations:
  a) each administration involved shall issue its opinions within the term of 30 days, otherwise the opinion shall be deemed to have been issued positively and without conditions;
  b) within 15 days from the expiry of the deadline for issuing the administrations’ opinions, a telematic meeting of all the administrations involved shall take place and, within the following 10 days, the Steering Committee shall adopt the final determination.
  In any case, the AU application shall be deemed to have been granted if, within 90 days from the date of its submission, no decision of refusal has been communicated by an administration responsible for the protection of the landscape or cultural heritage. In such cases, the applicant may request the proceeding administration to issue, electronically, an attestation
  regarding the issuance of the AU. In the event of refusal by the administrations involved in the procedure and in the absence of the final determination of the Steering Committee within the aforementioned terms, the President of the Region concerned, at the request of the applicant, shall issue the final determination of the Steering
  Committee within 15 days of the request^[8].

8. Register of PV Plants

Art. 12 Decree 181/2023

ENEA shall establish and manage a public register in which producers and distributors of PV Plants components can apply to register components that meet certain spatial and quality requirements.

This will allow interested parties to know the producers and distributors of these components.

9. Provisions on competitive procedures and protection of domestic customers

Art. 14 Decree 181/2023

Art. 11 of Legislative Decree No. 210 of 8 November 2021 with regard to vulnerable customers^[9] is amended as follows:

• from the date of termination of the enhanced protection service^[10], vulnerable customers shall be entitled to be supplied with electricity, in accordance with the conditions regulated by
  ARERA and at a price set in the wholesale market (the “Vulnerability Service”). The Vulnerability Service is provided by suppliers registered in the list of entities authorized to sell electricity;
• ARERA regulates the Vulnerability Service, providing, in particular:
  a) the limitation of the service to the supply of electricity only;
  b) the assignment of the service, for a maximum duration of four years, through competitive procedures relating to homogeneous territorial areas in compliance with the principles of transparency, publicity, maximum participation and nondiscrimination;
  c) the amount of the maximum fee for assigning the service;
  d) the obligation for each supplier to carry out the activity relating to the Vulnerability Service separately from any other activity;
  e) the prohibition for the supplier to use:
  1) the marketing channel of the Vulnerability Service to promote offers;
  2) the data and information acquired in the performance of the Vulnerability Service for activities other than the Vulnerability Service;
  3) the use of the same brand under which it carries out activities other than the Vulnerability Service.

ARERA shall adopt the necessary measures to ensure that the competitive procedures11 are carried out, assigning a maximum term of 30 days from the date of entry into force of Decree 181/2023 and, in any case, no later than 10 January 2024, for the submission of offers by economic operators.

You can find the Decree 181/2023 at this link

^[1] In brief, CDF are long-term contracts between a renewable energy producer and a public entity (e.g. the GSE), based on the auction mechanism and a difference between the market price and a strike price agreed in the relevant auction. More precisely, in the bids submitted during the auction, applicants declare to the entity the future price for the energy selling. The successful bidders are entitled to a predefined remuneration, guaranteed for a long period of time. If the market price of electricity is lower than the remuneration, the successful bidder will receive a supplement equal to the difference between the two amounts. If, on the other hand, the market price of electricity is higher than the remuneration, the successful bidder will have to return the difference between the two amounts to the entity (you can find a model of CFD at this link in Italian version https://www.acquirenteunico.it/sites/default/files/documenti/4554_allegato_1_Standard_di_Contratto_Differenziale_a_2_vie.pdf.
^[2] You can find the Attachment to PITESAI concerning suitable and unsuitable areas for cultivation https://www.arcgis.com/home/webmap/viewer.html?webmap=ec1b7e39dbb7446cad992b7d2cfb3286&extent=-1.3762,34.3882,31.0774,48.4506.https://www.arcgis.com/home/webmap/viewer
^[3] In brief, pursuant to Article 14 of Law 241/1990, a procedure is carried out by means of a Steering Committee (“Conferenza di servizi”), where all the administrations involved shall submit their opinions and, at the end, the proceeding administration issues a positive or negative decision.
^[4] Such facilities are provided for by the Decree of the Minister for Ecological Transition of 21 December 2021.
^[5] Pursuant to Art. 23 of Legislative Decree No. 47 of 9 June 2020 (the “LD 47/2020”), the right of operators in certain economic sectors to emit emissions (defined by Art. 3 par. 1, lett. p) of LD 47/2020 as “the release of greenhouse gases into the atmosphere from sources located in a plant”) is represented by allowances (defined by Art. 3 par. 1, lett. ss) of Legislative Decree 47/2020 as “the right to emit one tonne of carbon dioxide equivalent for a given period and transferable in accordance therewith”) that are auctioned by the GSE.
^[6] However, pursuant to Art. 4, par. 5 of Decree 181/2023, these rules do not apply to the owners of Plants powered by geothermal energy sources required to pay contributions pursuant to Art. 16, par. 4 of Legislative Decree No 22 of 11 February 2010, nor to the owners of hydroelectric Plants required to pay contributions for the implementation of environmental and territorial compensation measures pursuant to Article 12, par. 1- ter, lett. l) of Legislative Decree No 79 of 16 March 1999.
^[7] In this regard, Art. 6, par. 1of Law No. 84 of 28 January 1994 specifies the 15 Port System Authoritie established (e.g. Western Ligurian Sea).
^8] The above mentioned authorization procedures are also applicable, further to the request of the applicant,
to the procedures for the construction and operation of works and infrastructures in progress at the date of
entry into force of Decree 181/2023.
^[9] Pursuant to Art. 11 para. 1 of Legislative Decree No. 210 of 8 November 2021, vulnerable customers are customers:
a) who are in an economically disadvantaged condition or who have a serious health condition requiring the use of medical-therapeutic equipment powered by electricity, which is necessary for their survival;
b) in which there are persons with a serious health condition requiring the use of medical/therapeutic equipment powered by electricity that is necessary to maintain them alive;
c) who are disabled persons within the meaning of Art. 3 of Law No 104 of 5 February 1992;
d) whose users are located in the non-interconnected minor islands;
e) whose users are located in emergency housing facilities following calamitous events;
f) over 75 years of age.
^{[10] In brief, the enhanced protection service consists of electricity and natural gas supply services with economic (price) and contractual conditions defined by ARERA and intended for small end customers (such as households and micro-businesses) who have not yet chosen a seller in the free market.}