On August 13th 2024, the Ministerial Decree adopted by the Ministry of the Environment and Energy Security (“MASE”) on June 19th 2024, on “Incentivisation of renewable source plants that are innovative or have high generation costs and low environmental and territorial impact” (“FER 2 Decree“), came into force. Below is a summary of the main innovations provided under the FER 2 Decree.
Subject and purpose – Articles 1 and 3 of the FER 2 Decree
The FER 2 Decree is aimed at supporting the production of electricity from innovative renewable energy plants or those with high generation costs, through the granting of incentives that stimulate their competitiveness and allow them to contribute to the achievement of the decarbonization targets for 2030.
The plants eligible to be granted with incentives under the FER 2 Decree are the following:
- biogas plants with a nominal power not exceeding 300 KW of electricity;
- biomass plants with a nominal capacity of no more than 1,000 KW of electricity;
- thermodynamic solar plants;
- offshore floating wind power plants, i.e., offshore wind power plants on fixed foundations with a minimum distance from the coast of 12 nautical miles;
- off-shore floating photovoltaic installations and floating photovoltaic installations on inland waters (together the “Eligible Installations”).
Eligibility Requirements – Article 3 of FER 2 Decree
For the purposes of obtaining access to the incentives, Eligible Installations must comply with the following conditions:
- holding a permit for the construction and operation of the plant;
- definitive acceptance of the grid connection proposal;
- compliance with the minimum environmental and performance requirements set out in Annex 2 of the FER 2 Decree[1].
Exclusion – Article 3 of the FER 2 Decree
The following are excluded from the eligibility for incentives under the FER 2 Decree:
i. from a subjective point of view:
- companies in a “difficult situation”, as defined in the Communication from the Guidelines on National Aid Commission for rescuing and restructuring non-financial enterprises in financial difficulties, published in the Official Journal of the European Union C 249 of July 31st 2014;
- entities for which one of the grounds for exclusion set out in Articles 94 to 98 of Italian Legislative Decree No 36 of March 31st 2023, applies;
- entities subject to the causes of prohibition, forfeiture or suspension referred to in Article 67 of Italian Legislative Decree No 159 of September 6th 2011;
- companies against which a recovery order is pending as a result of a previous decision of the European Commission declaring the incentives received illegal and incompatible with the internal market;
ii. from an objective point of view:
the plants that started the construction works before the publication of the ranking list provided for by the FER 2 Decree.
Procedures for accessing incentives – Articles 4 et seq. of FER 2 Decree
The interested plants will have to participate in competitive tenders carried out in telematic form, requiring the submission of an offer for a percentage reduction on the reference rate, in any case not less than 2%.
Access to the 2024 renewable energy incentives is linked to participation in public tenders, each for a different type of plant (A, B, B-1, C, C-1, D, E, E-1 and F)[2].
The tenders will be announced by the GSE over the five-year period 2024-2028, making available a series of power quotas, for a total cumulative capacity of 4.59 GW.
The details on how the procedures will be carried out will be defined by future operating rules, which should be approved within 30 days of the entry into force of the FER 2 Decree.
In any case, within each competitive procedure there shall be:
- a 60-day period for submitting the application to access the incentives;
- the subsequent publication of the rankings within the following 90 days;
- a maximum timeframe for the entry into operation for each type of plant resulting in a useful position [3].
Incentive rates – Article 7 and Annex A of the draft “Testo Unico Rinnovabili”
For tenders carried out in 2024, the reference incentive rates put up for auction are those indicated in Annex 1, i.e.:
- for biogas plants: 233 euro/MWh;
- for traditional geothermal: 100 euro/MWh;
- for zero-emission geothermal: 200 euros/MWh;
- for biomass plants: 246 euros/MWh for plants up to 300 kW, 185 euros/MWh for those above that;
- for offshore wind plants: 185 euros/MWh;
- for tidal, wave and other marine energy: 180 euros/MWh;
- for offshore floating photovoltaic installations: 105 euros/MWh;
- for floating photovoltaic installations on inland waters: 90 euros/MWh for installations up to 1000 kW power and 75 euros/MWh for those above that;
- for thermodynamic solar plants: €300/MWh for plants up to 300 kW power, €240/MWh for plants above 300 kW but below 5000 kW power and €200/MWh for those above 5000 kW power.
For subsequent years, the rates tendered shall be those set out in Annex 1, reduced by 3% per year.
Cumulation of incentives – Article 12 of FER 2 Decree
The incentive rates covered by the FER 2 Decree can only be cumulated with the following aid mechanisms falling into the following categories:
(a) exclusively for new plants, capital grants not exceeding 40% of the investment cost;
(b) guarantee funds and revolving funds;
(c) tax relief in the form of tax credits or deductions from business income for investments in machinery and equipment.
In this case, the rate is adjusted according to the rules set out in Annex 1 of the FER 2 Decree.
For further details please contact our Energy Team and consult the text of the FER 2 Decree available at the following link:
https://www.mase.gov.it/node/18946
[1] Refer to Annex 2 of the Ministerial Decree of June 19th 2024, which provides specific technical requirements for each type of eligible plant.
[2] Refer to the chart in Article 4(5) of the FER 2 Decree.
[3] Refer to the chart in Article 7 of the FER 2 Decree.
