Yet uncertainty on future incentives for wind power has raised concerns that even the finally approved plan’s 12.7GW objective could be at risk. The Italian government recently announced plans to revise the incentive scheme from one based on green certificates to one in which a fixed tariff would be issued. The positive aspect of this is that banks providing project-financing loans tend to prefer feed-in tariffs over market-based mechanisms like green certificates. However, the lack of detail on how the system would work has already slowed investments. And a measure that would introduce competitive auctions for big projects, favouring those that seek a lower tariff, appears excessively complex for a market in need of simplicity.
The Italian wind energy association ANEV has called for rapid government intervention to safeguard existing investments and provide a clear and stable framework for incentives. Otherwise, the association warns, Italy may not be able to meet its EU renewable energy obligations and would be forced to purchase the shortfall from outside its borders.
Italy has paid attractive incentive prices to develop its existing wind farms, with the combined price of green certificates and electricity reaching as high as €0.20/kWh just a few years ago. Prices have dropped significantly since 2008, and there is some debate over whether Italy has paid too much to get its once-sluggish wind industry moving towards targets.
Giuseppe Mastropieri, head of renewable energy sources at research firm Nomisma Energia, believes that a simple and stable incentive scheme is what is required. "It still needs to be relatively generous because there are few good wind sites remaining," he says. Indeed, he believes that a sensible way for Italy to reach its 2020 target would involve repowering at a number of wind farms established in the 1990s. Many of these have good wind resources but older, less efficient turbines.
Italy’s wind target includes an objective of 680MW in offshore wind capacity by 2020. While the nation has no offshore wind farms, there are a few projects in the advanced stages of the authorisation process. The offshore potential is not insignificant and the country’s previous government once forecast as much as 2GW of wind capacity offshore by 2020. Mastropieri is among those who believe that Italy should at least begin a full evaluation of its offshore possibilities by bringing a small amount of offshore capacity online.
One of the most urgent problems for developing wind in Italy is the grid. "It’s a very serious problem, if we are to meet EU objectives," says Andrea Marchisio, head of wind energy at Italy’s renewable energy association APER. It is much more important for Italy to meet its production forecast of 20TWh of electricity annually than to have 12.7GW of turbines in operation. Power curtailments to protect the grid have been a common feature of the market in areas with a high concentration of wind farms. At the same time, construction of some wind projects is held up while their developers wait for parts of the grid to be built.
Another problem for project developers in Italy is a long and often complex authorisation process. Some progress seems to have been made, with the approval last year of national guidelines for the siting and authorisation of wind farms. Nonetheless, some regions continue to oppose developments, a problem that perhaps could be partially overcome should long-awaited and binding renewable-energy targets be established for each of Italy’s 20 regions. In the meantime, many developers have become accustomed to running through the bureaucratic hoops. And, at least for now, concerns about the authorisation process have taken a back seat to worries about financing.