Analyst boosts Italian offshore wind forecast after EU support nod
Approval of long-awaited decree puts in place the crucial CfD element that will allow Italy to start holding seabed tenders
The European Commission’s approval of an Italian offtake scheme to support the development of 4.6GW of new renewable capacity by 2030 has raised expectations about the pace at which the country can move ahead forward with its plans to develop offshore wind.
Italy had sought approval under EU state aid rules for a planned Contract for Difference (CfD) scheme financed through a levy included in electricity bills to support the development of renewable energy sources.
The CfD will offer long-term price stability by guaranteeing a minimum level of return to suppliers of electricity from renewable sources with a cap on prices when they run higher than the strike price.
The Commission’s approval for Italy’s FER II decree includes coverage for tendering up to 3.8GW of offshore wind by the end of 2028, including both fixed bottom and floating wind
Expectations of an acceleration in the tendering process led offshore wind specialist TGS-4C Offshore to revise its long-term (2040) forecast for Italian offshore wind to 5GW — defined to include installation underway offshore as well as fully commissioned — from 4GW previously.
Delays in processing environmental impact assessments for proposed wind farms mean TGS-4C Offshore also forecasts that the country will have just 500MW of offshore wind capacity in place by 2030, compared to a targeted 2.1GW.
Italy has currently producing just 30MW from a single offshore wind farm at Taranto, commissioned in 2022 and only one floating wind project — the 250MW Hannibal project — has passed through the EIA process.
The FER II decree has undergone multiple revisions and redrafting over the last five years. One of its previous iterations, since dropped, included a price cap of €185 ($199)/MWh for 25 years.
Thinking big
But the decree can now be used as the framework for Italy to begin holding tenders for a first wave of offshore wind projects, TGS-4C Offshore noted.
Grid connection requests have been received for more than 90GW of projects, including several overlapping areas, according to Italian TSO entity Terna.
In its statement on the FER II approval, the EU said the support scheme for the Italian projects, approved under EU State aid rules, contributes to the EU’s strategic objectives relating to the European Green Deal, while helping to end dependence on Russian fossil fuels and fast forward the green transition.
Commission executive vice president for competition policy Margrethe Vestager said the scheme will provide support for innovative or less mature renewables technologies — such as floating wind — and can achieve these objectives while avoiding distortions of competition.
Italian Prime Minister Giorgia Meloni has declared her support for developing clean energy but some of her ideas on using billions of funds from Italy's climate fund for an energy-orientated development programme for Africa have raised concerns among critics.
Ideas about turning Italy into an energy hub for Europe tend to be associated with Enrico Mattei, founder of state oil and gas giant Eni. Italian green think tank Ecco is among those expressing concern about how far such plans will represent a move away from fossil fuels.
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