- The European Commission has authorised Italy’s €23 billion scheme to support onshore wind, solar, hydropower and sewage gas plants through 20‑year contracts for difference (CfDs). The programme is expected to add 37.15 GW of renewable capacity, almost half of Italy’s current renewable fleet.
- Italy aims for renewables to supply 39.4% of its gross final electricity consumption by 2030. Brussels said the aid is necessary and proportionate to help Italy meet this goal and reduce fossil fuel imports.
- Italy has fallen behind Spain and Germany in solar and wind installations. The CfD scheme seeks to accelerate projects amid high interest rates and supply‑chain uncertainty.
The European Commission has greenlit one of the largest renewable energy subsidy schemes in Europe, allowing Italy to spend €23 billion (£19.5 billion) on long‑term contracts for difference (CfDs) to spur wind, solar and other clean energy projects.
The aid, which will run until 2028, is designed to add more than 37 GW of new capacity and propel Italy toward its 2030 target of generating 39.4% of electricity from renewables.
The decision underscores Brussels’ willingness to deploy massive subsidies even amid budgetary pressures from the Iran war and provides a benchmark for other European governments, including the UK, that rely on auction‑based contracts.
Under the scheme, Italy will award CfDs through competitive tenders organised by the national energy agency. Projects over 1 MW will compete in auctions, while smaller projects may receive support on a first‑come, first‑served basis.
Winning bidders will sign 20‑year contracts guaranteeing a strike price for each kilowatt‑hour produced. When wholesale prices drop below the strike price, the Italian government will pay generators the difference; when prices exceed it, developers must repay the surplus. This two‑way mechanism is intended to shield both consumers and investors from price volatility.
Brussels said the support will stimulate investment without over‑compensation. The measure is expected to mobilise around 37.15 GW of additional capacity – equivalent to nearly half Italy’s existing renewables fleet. The scheme covers onshore wind, solar photovoltaic, hydropower and plants using sewage gas.
Italy hopes this will bring its renewable share of electricity to 39.4% by 2030. The EU noted that the aid is necessary to reach Italy’s decarbonisation goals and to reduce reliance on imported fossil fuels.
Unlocking investment
Italy’s renewable build‑out has lagged behind other large EU economies, with deployment hampered by lengthy permitting, grid constraints and a surge in equipment costs. By guaranteeing long‑term revenue, the CfD scheme aims to unlock investment even amid high interest rates and supply‑chain uncertainty.
The measure also allows Italy to align with the EU’s broader Clean Industrial Deal, which emphasises domestic clean energy capacity and industrial competitiveness.
The Commission insisted that the aid is proportionate and includes safeguards: auctions will cap the strike price to avoid windfall profits and smaller projects will have simplified access to reduce administrative burdens. It also highlighted that by promoting domestic renewables, Italy will reduce its reliance on imported gas and strengthen energy security.
Italy’s generous budget – €23 billion across roughly 37 GW – translates to an average support of about €620,000 per megawatt, a level that may set expectations for investors across Europe. If Italy’s auctions clear at higher prices, it could embolden renewable developers to lobby for more generous terms in the UK’s next CfD allocation round.
