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In recent times, unfortunately, also in light of recent sad international events, there have been various interventions by the legislator in the energy field, which for the time being have resulted in determining an increase of investors’ mistrust in the renewable sector. The latest measure seems to want to restore investors’ confidence, but there is a long way to go.

The measure which first upset the plans of those involved in the production of electricity from renewable source plants was art. 16 of Law Decree no. 4 of 27 January 2022 (the so-called DL Sostegni ter). Without wanting to provide an in-depth analysis of the content of art. 16, but rather only just a brief outline, from 1 February to 31 December 2022, the legislator had provided for the application of a two-way compensation mechanism. The mechanism was calculated on the price of energy produced by photovoltaic plants benefiting from fixed tariffs, deriving from the so-called energy account, and on the electricity produced by hydroelectric, geothermal and wind power plants that do not benefit from incentive mechanisms, all of which have a capacity of over 20 kW: the producer would have had to pay back the difference between the market price and an average reference revenue determined by the legislator.

Art. 16 had been the subject of severe criticism not only from the world of renewable energy producers, but also from ARERA (the Energy, Networks and Environment Regulatory Authority) itself, which in its memorandum of February 18, 2022 (60/2022/I/COM) had pointed out certain critical aspects of art. 16 (e.g. the fact that the profitability of renewable source plants has wide margins of variability during the plant’s useful life and that this variability impacts differently on incentivized and non-incentivized plants, or the fact that the rule affects only some possible beneficiaries of the “extra profits” but not all).

Later on, probably in response to the criticisms received, but perhaps more likely due to the difficulties in application, the legislator intervened with art. 5 of Law Decree no. 13 of February 2022 (the so-called Fraud Prevention Decree), which came into force on February 26, 2022. In particular, paragraph 8 of art. 5, on the one hand provides for the repeal of art. 16 of Law Decree no. 4/2022, thus preventing the concrete application of the same, and on the other hand introduces new rules aimed at capturing the so-called “extra profits” that would have accrued or would accrue in the period between February 1, 2022 and December 31, 2022, and only in favor of those plants with a power greater than 20 kW but this time limited

– to photovoltaic sources, provided that they benefit from a fixed premium deriving from the Energy Account not dependent on market prices;

– to solar, hydroelectric, geothermal and wind power, provided they do not have access to incentive mechanisms, which came into operation prior to January 1, 2010.

Also in this case the so-called extra profit would be determined through the application of a two-way compensation mechanism on the price of energy, understood as being the difference between the prices identified by the legislator based on zonal prices (therefore based on a fixed number) and the market price calculated according to parameters indicated by the legislator. Moreover, this mechanism is not applicable if there are supply contracts (PPA) having certain characteristics.

The extra income determined in this way will be paid into a special fund set up at the Cassa per i Servizi Energetici ed Ambientali and used to reduce the requirement needed to cover general charges relating to the electricity system.

Similar objections to those raised against art. 16 of Decree no. 4/2022 may be raised against art. 5 (to which the retroactivity of the regulation is certainly added). In our opinion, the most perverse effect of the legislation is, however, the climate of mistrust that sneaks in among investors in renewable energies; a mistrust that could undermine Italy’s ability to achieve the ambitious (but now necessary) objectives it has set itself.

Finally and in the opposite direction, almost as if to restore that climate of trust and confidence in the legislator and in the will to direct energy policy choices in favour of renewables, Law Decree 17/2022, almost as if to avert any criticism, is entitled “Urgent measures for the containment of electricity and natural gas costs, for the development of renewable energy and for the relaunch of industrial policies”. Law Decree 17/2022 contains, in fact, regulations on several subjects and, for the aspects relating to energy and without describing the specifics of the individual provisions, seems to be a more balanced measure, less governed by the need to find resources to cut electricity costs. It also appears to be wide-ranging and more oriented to pursuing the road of administrative simplification for plants from renewable sources (art. 9 et seq.). Undoubtedly a positive note is the allocation of a tax credit for companies in southern Italy that invest in energy efficiency, which then becomes a credit that can be accumulated with other benefits.

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