Italy's new electricity market liberalisation law specifically states that power from renewables has priority over other sources of generation. Furthermore, a renewables obligation is placed on all importers or producers of non-renewables power who, from 2001, are required to include a fixed percentage of renewables in the power they feed into the grid. Virtual trading of green power credits between producers is allowed and it will be up to the "network manager," a body responsible for transmission and dispatching of electricity, to balance annual production fluctuations from renewables. As well as the network manager the Italian electricity market will be controlled by a "sole purchaser" and a "market operator" in charge of economic management of the market. Supply contracts are agreed with the sole purchaser who must guarantee the use of renewables. In the transition period to full liberalisation, power purchase contracts already held by renewables plant developers will be honoured, provided the plant comes on-line as scheduled. An extension of the contract for up to two years may be allowed in specific circumstances. The liberalisation legislation also states that long term targets are to be set for each renewable and that provinces "must favour the involvement of the local communities in the initiatives" and provide for competitive tendering to encourage the use of renewables.
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