The European Commission has approved, under EU State aid rules, an Italian scheme to support a total of 4590MW of new capacity for electricity production from renewable energy sources.

The €35bn of subsidies, to be recouped through a levy included in the electricity bills of final consumers, will support the construction of new plants and technologies, including geothermal, offshore, biogas and biomass.

Under the scheme, the aid will take the form of a two-way contract for difference for each kWh of electricity produced and fed into the grid and will be paid for a duration equal to the useful life of the plants. The EC waived objections on the basis that “the aid brings about positive effects that outweigh any potential distortion of competition and trade in the EU”.

“This scheme enables Italy to support the production of renewable electricity from various technologies, including innovative ones. The measure helps Italy meet its emission reduction and electricity production targets. It will also contribute to achieving the European Green Deal objectives, while limiting possible distortions of competition,” said Margrethe Vestager, executive VP in charge of competition policy.

Italy has been one of the largest importers of electricity in the EU.

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