The European Commission unblocked Italy’s Energy Release mechanism, following a probe into the scheme’s potential to qualify as state aid. However, question marks remain over the introduction of a tender process aimed at enabling the construction of the extra renewable capacity needed to fulfill beneficiaries’ scheme commitments.
The Commission conveyed the changes needed for the scheme to receive a “go-ahead” in a letter from 27 June 2025. The Italian Minister for the Environment and Energy Security signed a modifying decree a month later.
Next, the decree will be sent to the Court of Auditors and will be available on the Ministry’s website once published in the Official Gazette.
In June 2025, Italian market operator GSE accepted more than 3,000 applications from the industrial sector for its Energy Release scheme to receive a total of 23 TWh renewable electricity annually, including Guarantees of Origin (GOs), for a period of three years at a discounted price of EUR 65/MWh. NB – the annual volume was increased from 23 TWh to 24 TWh following the Commission’s approval letter.
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 outsourced via third parties by signing Power Purchase Agreements (PPAs).
The Commission’s approval hinges on GSE organising a separate tender for the construction and operation of the new renewable capacity needed to fulfill the above-mentioned obligation.
The tender would be open to both scheme beneficiaries and renewable developers, although participation by the beneficiaries would be mandatory. Tender participants would be bidding to receive an upfront premium (a grant) to cover the cost of asset development.
Half of the newly generated electricity would then be covered by a two-way Contract for Difference (CfD) concluded with the GSE at a strike price of EUR 65/MWh for a period of 20 years.
The Commission’s letter lacks clarity and creates ambiguity regarding the practical implementation of the second tender meant to secure the new renewable production capacities.
Veyt has previously stated that dividing the 24 TWh annual volume equally among over 3,000 scheme beneficiaries would make it difficult for those beneficiaries to find producers willing to sign PPAs for extremely small production volumes.
In this regard, the second tender could be appropriate if it serves as a matchmaking platform between producers and scheme beneficiaries.
From a GO perspective, the market impact would depend on when the scheme would officially start given that there are only four months until the end of 2025. The official approval of the tender process and the scheme’s operating rules by the Italian authorities expected in September 2025, should answer the open questions. Veyt will continue to follow the topic closely and provide updates.
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