Italy: Conto Energia V blocks PV development

In Italy, Conto Energia V was adopted at the beginning of July. For the private sector, it has come into force on August 27 (January 1, 2013 for public administration) and it will expire 30 days after having reached the incentive cap of € 6.7 billion per year. According to Gestore Servizi Energetici (GSE), the Italian public authority for the regulation of renewable energies, the counter is literally running and has already marked the 6 billion and 330 million level in annual incentives. Growing on at this rate, the fifth Conto Energia, according to experts, could already expire within a few weeks after its start. According to other experts, the corresponding funds will remain open to applicants until 2014. However, since PV systems with less than 12 kW do not have to be registered getting their financings from the Conto Energia’s budget as well, it is most likely that the funds will already soon be absorbed completely. This is just one of the several critical points arisen from the feed-in tariff scheme for renewables designed by the government of Mario Monti.

Grafics: The feed-in tariffs provided by Italian Conto Energia V (source: GIFI)

The new incentive scheme

Conto Energia V provides two separate tariffs: one applies to the electricity produced only – not to its consumption and not to its transfer via the grid (so called all-inclusive-tariff). The second tariff is a premium for self-consumption: a special feature that supports the in-house consumption of electricity generated by PV systems.The Conto Energia V introduces a register for all PV plants exceeding 12 kW and aims at reducing solar incentives to € 200 million p.a. for all systems included.No entry into the register is needed in the following cases:• for systems up to 20 kW, if operators accept a cut of 20% of the incentive.• for systems up to 50 kW, if as a part of the installation an asbestos roof is replaced;• for systems up to 50 kW, if they implement an innovative PV technology, make use of Concentrated Solar Power (CSP) technology, or are installed on public buildings.

Decreasing annual budgetsThe first register will have at its disposal € 140 million; the second has a fixed budget of € 120 million. The following registers will start with € 80 million – until the cap of € 6.7 billion of annual remuneration is reached.If a registered PV plant is connected to the grid while the yearly budget is already exhausted, the incentive remains intact but can be reduced by 5% compared to the original level. However, the corresponding funds do not lift the overall annual cap of € 6.7 billion for renewable electricity remuneration.The bonuses for using EU material and replacing asbestos are also granted (respectively € 0.02/kW and € 0.03 /kW) and may be combined.Obviously, the critical aspect of the obligation to register for systems with rated power starting from 12 kW are increased measuring and control expenditures as well as greater bureaucracy. However, what has really deeply concerned the branch’s representatives is the attitude towards renewables shown by the Ministry of Economic Development. Valerio Natalizia, President of the Gruppo Imprese Fotovoltaiche Italiane (GIFI), states that the Conto Energia V is punitive. Why? GIFI according to Natalizia had requested the government to cut down PV incentives even more drastically than now decided, if only less red tape and bureaucracy had been introduced. “But the government didn’t listen, deliberately, preferring to design a complicated system introducing the register for even small PV installations.”GIFI’s president, as most of the renewable industry players, is convinced that Conto Energia V has been designed in the interest of the still well established Italian oil-and-gas lobby. To support his position he reminds of Easter Monday, when between 1 and 2 pm according to a statement of TERNA – Italy’s national transmission grid operator – the electricity produced in Italy reached a level of 64% coming from renewable sources, whereby in Sicily the level was even 94%. The result was that during peak hours the electricity price in Sicily was 0 €, hence conventional energy producers were losing money.

However, instead of seriously discussing their plans with all parties that have a stake in the electricity field the government presented a discriminatory and partial regulation undermining the further development of PV in Italy. Be that as it may: even now there should be time and reason for a serious debate on national energy policy. In order to create a modern electricity supply system, smart grids have to be implemented and national grids to be modernized, supporting a vivid renewable energy sector as well as step-by-step reshaping the role of the traditional operators, first of all, Enel.New standard demands remote control of power feed-inInstead, Conto Energia V has been introduced very quickly, without serious debates: GIFI and other national associations complain about the fact they never had the chance to meet the Minister in charge, but just government officers. While with the beginning of a serious dialogue cards could be reshuffled, the installation of PV systems larger than 6 kW is put under threat by another new regulation. By the end of April, 2012 the Authority for Electricity and Gas (AEG) voted for the adoption of the standard CEI-021 starting from July 2012. It obliges PV operators to install an external interface for inverters, in order to modulate and reduce the electricity feed-in to the grid from PV systems. Officially, the provision shall contribute to the modernization of the national grid, in particular of low-voltage networks, through a better and smoother transmission of electricity into the grid. Practically, nobody is currently connecting PV plants to the grid, because such external interfaces are unavailable. When the standard came into force, the suppliers of the necessary interfaces stated that such systems would not be available within 2 to 4 months. Furthermore, many inverter producers and distributors complain about significant losses, because their inverters in stock cannot be updated and sold anymore.All this disruptive action came up when, against all odds, the PV market in Italy was still running –although it was no longer supported by banks and credit systems that were paralysed by the financial crisis. There is speculation that the new PV tariffs are the result of a personal intervention by Corrado Passera, the Minister of Economic Development. It’s not a secret that between Passera and Corrado Clini – the Minister of the Environment, who was a highly respected public officer already in the former Berlusconi government – there has been hostility over this issue.On the one hand, Valerio Natalizia thinks that a perspective for the near future is missing, putting under pressure many medium-large size companies that probably won’t be able to follow the current aggressive price reduction. On the other hand, he is deeply convinced that although installing a PV plant is becoming more and more complicated, residential installations won’t stop in Italy. For sure, the market will face a significant slowdown.

Cristina Barbero

 

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