More than 50% of Italy's new capacity came online in the last three months of 2008. The end year rush was sparked by a legislative change at the start of 2009 removing the opportunity for wind project developers to sell electricity for a premium at the same time as taking advantage of capital grants and soft loans, explains Christof Stork from the Italian office of international wind consultancy Garrad Hassan.
While the end-year squeeze is likely to lead to a slowdown in new installations in the first quarter of 2009, the number of wind farms already under construction indicates that full-year installations should be about the same this year as last, says Luciano Pirazzi of Ente per le Nuove Tecnologie, l'Energia e l'Ambiente (ENEA), the main government agency responsible for promoting renewable energy. "If it's not 1000 MW, it will be 900 MW," he says.
The southern Italian regions of Apulia, Sicily and Campania -- respectively number one, two and three in terms of installed wind capacity -- led growth in 2008 (map) and are expected to continue as main markets in 2009. The island region of Sardinia, which while known for its good wind resources has seen wind development opposed at times by the regional government, managed to add 100 MW in 2008 to bring its total to 467 MW. The Sardinian government appears to be taking a somewhat less obstructionist approach to wind energy. One reason may be that a number of wind developers who saw their projects blocked on the island in recent years have won court cases allowing them to proceed.
The stop-and-go-approach of many Italian regions to wind energy continues to be a problem for developers, or at least a potential source of worry. A case in point is the region of Calabria, one of the country's hot spots for wind development, which began 2009 with a new law placing limitations on the growth of wind and other renewable energy sources.
On the other hand, the northern region of Liguria recently unveiled a new energy plan that increased its objective for wind energy to 120 MW from a previous 8 MW. Two new Italian regions also joined the wind club in 2008, with the opening of a 12.5 MW facility in the northwest region of Piedmont and a 1.35 MW plant in the north-eastern Veneto region.
The Veneto project used a 1.35 MW machine produced by an Italian company, Bolzano-based Leitwind, which made its debut on the Italian market in 2008 with its first commercial machines, having earlier installed a few prototypes. Leitwind, with 7.35 MW of its turbines coming online last year, remains a niche player in its home market for now. But its market entry is evidence of the increasing competitive panorama among turbine suppliers. Denmark's Vestas continued to be Italy's dominant player, with 341.6 MW of its machines installed in 2008, but behind it was Gamesa, with 162 MW installed, along with a slough of manufacturers with over 100 MW installed (chart).
Developers and owners
Among developers, satellites of Veronagest, a Verona-based company that has been active for the last few years, installed 148.25 MW. Not only were these the group's first wind farms to become operational, Veronagest also took pole position as Italy's lead developer last year, narrowly edging out Fri-el Green Energy. Fri-el, based in Bolzano, added 124 MW in 2008. Next was IVPC, Italy's overall leader in wind development, which started up wind farms with a combined capacity of 97.75 MW.
Among wind farm owners, by the end of 2008 Britain's International Power was producing electricity from 550 MW of wind farms in Italy, representing nearly 15% of the country's installed wind capacity. In 2007, the company acquired numerous wind farms originally developed by IVPC. International Power is publicly listed in London and the descendent of one-time British utility National Power. Other major owners of wind plant in Italy are Fri-el and Enel Green Power, the recently created renewables division of Italian utility Enel. Each has a market share of just over 10%.
One key trend in Italy last year was the entry of some major utilities into the market. RWE Innogy, the renewable arm of German utility RWE, acquired a holding in Fri-el, while Swiss utility Atel bought a minority stake in the Italian business of Sicilian wind developer Moncada Energy Group. "The credit crunch means that less money is available and essentially lending to the smaller companies is affected," explains Stork of Garrad Hassan. "This, of course, opens the door wider to major utilities, which have a greater opportunity to finance on their balance sheets."
The growth of Italy's market continues to be underpinned by attractive power purchase prices. Wind power producers receive money from both the sale of electricity and green certificates that they sell to electricity retailers, who must source a growing proportion of their sales from renewable energy -- amounting to 5.3% in 2009.
While an excess supply of green certificates helped to depress prices for several months last year, the market has bounced back since the government approved a new law that effectively sets a floor under the price of the green certificates (Windpower Monthly, February 2009). Certificates are awarded for 15 years of production. The combined return on wind power from sales of certificates and electricity means producers are now receiving about EUR 0.18/kWh. Back in the autumn, the two revenue streams together had been yielding wind producers EUR 0.15/kWh, a high return for wind power by the standards of other European countries, but significantly lower than the prices to which market players in Italy have become accustomed.