GSE received 559 applications from 3,400 industrial consumers for 23 TWh of renewable electricity (RES-E) annually, including GOs, at EUR 65/MWh for the next three years. The volume of electricity requested exceeded 70 TWh.

The registration period ended on 3 March 2025. The volumes of electricity assigned to each applicant will be announced by Italy’s energy services operator GSE in April 2025, according to the Italian ministry of environment and energy security (MASE).

In return, companies will need to commit to building or repowering renewable energy assets within 40 months after their approval application and then producing at least double the volume of electricity that was secured via the auctions over the following 20 years. This can be done through third parties, such as utilities or developers, by signing PPAs.

Market impact

While not explicitly mentioned, Veyt assumes that the GO volumes that the GSE will allocate to the Energy Release beneficiaries will come from existing incentive schemes such as Ritiro Dedicato, Scambio sul Posto, and Tariffa Omnicomprensiv, which supply GOs to GSE auctions.

If the GSE removes 23 TWh of GOs per year from its regular auctions in favour of the scheme beneficiaries, it could reduce the GO volumes offered during the market sessions and could redirect other market players to procure renewable electricity from traders instead.

For comparison, GSE sold close to 21 TWh of GOs in 2024 auction sessions. Some volumes remained unsold as supply has been outweighing demand since 2023. Compounding the effect is the rollover of unsold volumes from previous auctions into the next ones.

As pointed out in our first analysis, the Energy Release plan operates parallel to two state aid schemes for the industry. If all Energy Release beneficiaries also benefit from these state aid schemes, these companies would not need to seek GOs to comply with the 30 % renewable electricity sourcing requirement under state aid.

The 23 TWh GOs allocated under the Energy Release scheme annually represents about 30 % of these industries’ total electricity consumption. Thus, the scheme has the potential to suppress the energy-intensive companies’ need to procure RES-E GOs, with 2025, 2026 and 2027 contracts expected to feel the bearish sentiment.

The market reportedly experienced the effects of the wait-and-see approach as industrials refrained from purchasing forward contracts amid the prospect of being selected under the Energy Release.

However, it is unclear whether state aid beneficiaries will be able to participate in both the Energy Release scheme and receive financial compensation through state aid. This is because the Energy Release is not a state aid scheme.

Veyt’s preliminary cancellation data for 2024 disclosure period shows that Italy’s RES-E GO consumption has increased by 3.7 % compared to last disclosure cycle’s demand of 92 TWh. Rising demand could be explained in part due to demand from energy-intensive consumers benefiting from the reduced electricity levy state aid if they source 30 % of electricity from renewables, using GOs and/or PPAs for compliance, among other options.

While bearish for the GO market in the short to medium term, the Energy Release encourages the industry to consume more renewable electricity with the associated GOs, increasing industrial demand for RES-E in the long run.

Although the industry is expected to be self-reliant by concluding PPAs or operating on-site generation, the GO cancellation is expected to go up, translating into a bullish sentiment on the market.

The Energy Release scheme should also lend support to the PPA market. The minimum 138 TWh that will have to be returned over 20 years would constitute between 3.5 – 5.5 GW of new renewable capacity depending on the technology, according to Veyt estimates. The Italian Energy Ministry puts the number at 5 GW.

According to Italian project developers, there is already demand for PPAs in the country, although supply is limited.

In the first quarter of 2025, the Italian PPA market was the second most active in Europe after Spain with 11 PPAs and 565 MW contracted for 638 GWh annual production volume, according to the Veyt PPA Database.

To compare, Italy recorded only seven PPAs totaling 109 MW for 178 GWh annual volume in Q1 2024.

The success of the Energy Release scheme is only one of several recent developments that have the potential to boost uptake of Italian PPAs. The Italian government recently passed a decree which requires market operator GME to launch a PPA trading platform and to act as a guarantor of last resort to PPAs. New compensations for curtailed solar production are also expected to improve revenues for generators who sign PPAs.

To discover how our advanced analytical tools can support your initiatives, reach out to our team at contact@veyt.com or visit veyt.com.