Last 23 December, the Ministry of the Environment and Energy Security reported in the Official Gazette the publication, on its institutional website, of the Director's Decree of 10 December 2024, 'Approval of the operating rules of the decree of 19 June 2024', the so-called FER 2, which came into force on 11 December 2024 (the day after its publication on the website). Thus, the decree for the incentivization of innovative or high-cost renewable source plants takes definitive shape.
The Operating Rules, issued by the GSE, provide the necessary information for the fulfilment of the provisions of FER 2 and, in general, of the relevant legal and regulatory framework.
The document illustrates the timeframes and processes for conducting the planned competitive procedures, the modalities for reallocating any unallocated production capacity, and the terms and fulfilments required for participation in the procedures and for inclusion in the rankings. The criteria for the formation of the rankings and the reasons for exclusion are also regulated, as well as the effects of renunciations and the reasons which, if ascertained after the start of operation, during the evaluation phase of the request for access to the incentives, lead to the forfeiture of the ranking list.
Each competitive procedure corresponds to
- a public tender;
- a production capacity quota, expressed in MW, for each procedure envisaged, to be allocated to the plants participating in the procedure;
- a ranking list, drawn up by the GSE as a result of the selection of projects and which takes into account any percentage reduction offered with respect to the reference tariff used as a basis for the competitive procedure and any application of priority criteria.
FER 2 provides for nine types of procedures, depending on the type of plant and the category of intervention. The types of plants allowed are
- biogas plants with a nominal capacity of no more than 300 kW of electricity
- biomass plants with a nominal capacity of no more than 1,000 electric kW;
- thermodynamic solar plants of any power;
- offshore floating wind power plants and offshore wind power plants on fixed foundations with a minimum distance from the coast of 12 nautical miles, of any power;
- off-shore floating photovoltaic installations and off-shore floating photovoltaic installations on inland waters, of any power;
- tidal, wave and other marine energy installations of any power;
- geothermal plants, conventional with innovations or with zero emissions, of any power.
FER 2 aims to support the realization of a total of 4.6 GW between 2024 and 2028.
Feed-in tariffs vary between 100 €/MWh and 300 €/MWh depending on technology and power. The technology on which the Decree focuses most is offshore wind power with 3.8 GW.
In order to participate in the auctions, one must be in possession of a permit (or favourable environmental impact assessment, where applicable) and a definitively accepted interconnection solution. Certain minimum environmental and performance criteria must then be met.
Both new construction projects and, for traditional geothermal plants with innovations only, projects for the revamping of existing plants are admitted to the procedures.
Each competitive procedure remains open for a period of 60 days from the date of publication of the notice on the GSE website, and the relative rankings are published within 90 days of the closing date.
In the event of non-saturation of the power quota, the GSE, for each type of procedure, in order to reallocate the available resources, provides for mechanisms to reallocate the unallocated power: in each competitive procedure the unallocated residual power quota is allocated to the quota of the first subsequent procedure, until the quotas are exhausted.
In addition, the GSE will assess the possibility of reallocating the power quota related to plants that were admitted in a useful position in a previous ranking and for which the applicant has submitted a waiver.
A mechanism for checking and supplementing applications is envisaged. Nonetheless, no responsibility can be attributed to the GSE, for failure to report inaccuracies or documental deficiencies, in respect of alleged errors committed at the time of the application for registration to the competitive procedures or of incorrect transmission of the mandatory documentation by the applicant, as the principle of 'preliminary relief' cannot be applied.
Failure to prove possession of the requirements and/or priority criteria declared during the registration phase shall result in exclusion from the ranking list.
FER 2 provides for the possibility (for plants with a capacity of up to 300 kW) or obligation (for plants with a capacity of over 300 kW) for applicants to make an offer of a percentage reduction in the reference tariff. If the reduction offered is equal, and the quota is saturated, the other priority criteria provided for by the decree will be taken into account:
a. plants built in the areas identified as suitable in implementation of Articles 20 and 23 of Legislative Decree No. 199 of 2021;
b. earliest date of completion of the application for participation in the procedure.
The percentage reduction offer must be greater than or equal to 2%, for plants with a power exceeding 300 kW. For each type of procedure, the reference tariff is that set out in Annex 1 to FER 2, reduced by 3% per year from 2025. For plants with power up to 300 kW, this reduction applies from 2026.
For plants that have been placed in a good position in the rankings published after the respective competitive procedures, FER 2 envisages, based on the source, the category of intervention and the type of applicant, compliance with precise time limits for entry into operation for the purpose of accessing the incentives; subsequent to entry into operation, the applicant may apply for the incentive.
The document also regulates the phase of requesting recognition of the incentive, the relative procedure of evaluation and verification, the determination of the tariff, the activation of contracts, and the subsequent modalities for disbursement of the incentive, also providing for specific conditions of cumulability with other measures as well as the system of verifications and controls.
The FER 2 provides for two types of incentives: an all-inclusive tariff or an incentive, calculated as the difference between the due tariff and the hourly zonal energy price (referring to the market zone where the electricity produced by the plant is fed into the grid). In the event that the difference is positive, the GSE disburses the incentives in an amount equal to the aforementioned difference, on the incentivized energy, i.e. on the net production fed into the grid. In the event that the value of the incentive is negative, the GSE will request the restitution of this differential by means of an adjustment, offsetting against other items pertaining to the same entity or direct payment. Plants with a capacity of less than or equal to 300 kW may opt for one or the other type. For plants with an output of more than 300 kW, only the incentive will be recognized.
In the case of the all-inclusive tariff, the consideration paid includes the remuneration of the energy produced and fed into the grid, which is collected by the GSE; in the case of the incentive, the energy produced and fed into the grid instead remains at the producer's disposal.
The first tender for tenders opened on 16 December for biogas and biomass plants for a quota of 10 MW and will close at 12 noon on 14 February 2025.
The timetable for subsequent procedures will be approved by the Ministry, based on the proposal of the Manager, by 31 March 2025 and communicated by the GSE two months before the opening of each procedure.
The decree envisages at least one procedure per year for biogas and biomass and at least three procedures over the entire period, i.e. until the end of 2028, for other technologies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
