A short guide to Italy’s Fer 1 decree with new incentives for PV, wind power, hydro and other renewables

After the “Fer 1” renewable energy decree, officially known as Ministerial Decree of 4 July 2019, took effect on 10 August, and the government published its Regulations for the Application to the Registers and Auctions (“Regolamento operativo per l’iscrizione ai Registri e alle Aste“), Italy’s Gestore dei Servizi Energetici (GSE) has published a guide to help operators navigate through the new legislation.

This is a quick review of the decree and the GSE’s guide for our English speaking readers (see also our dossier on the decree Fer 1 in Italian with analysis, comments and text).

Incentivised projects

The D.M. 04/07/2019 divides the plants that can access the incentives into four groups based on their type, their renewable energy source and the size of the projects:

Group A:

• new (greenfield) “on-shore” wind turbines, complete reconstruction of existing wind turbines, reactivation of systems decommissioned for more than 10 years or repowering (power increase) of existing systems
• new photovoltaic systems

Group A-2:

• new photovoltaic systems wholly replacing asbestos roofs of industrial and rural buildings

Group B:

• new hydroelectric plants, or complete reconstruction of existing hydro plants (excluding aqueduct systems), reactivation of plants decommissioned for more than 10 years or repowering (power increase) of existing hydro plants

• residual gases from purification processes in new plants, reactivation of plants decommissioned for more than 10 years or repowering (power increase) of existing hydro plants

Group C includes the plants subject to total or partial renovation:

• on-shore wind

• hydroelectric

• residual gases from purification processes.

Auctions and registers

There are two different ways of accessing incentives depending on the power of the plant and the group to which it belongs.

Application to the Registers

Plants with power greater than 1 kW (20 kW for photovoltaic systems) and less than 1 MW belonging to Groups A, A-2, B and C must apply to the Registers, whose available power quota is assigned based on specific priority criteria.

Application to Auction Procedures

Installations with power greater than or equal to 1 MW belonging to Groups A, B and C must apply by participating to the Auctions, whose available power quota is assigned to the participants offering the biggest discount on the incentive and, in case of equal discounts, applying additional priority criteria.

In case of upgrading, for all types of renewable sources, to determine how to apply for incentives, the power to be considered corresponds to the increase in power determined by the upgrading.

Installations qualifying for incentives can start receiving them after connecting to the grid and handing in the appropriate paperwork to the GSE.

How to register

Requests for applications to the Registers and Auctions and requests to start receiving incentives by winning participants can only be sent online through the GSE’s, FER-E Portal. GSE is the state controlled company managing public support for renewable energy in Italy. Its portal is accessible by registering in the Customer Area of ​​the site.

In the application phase, participants must upload onto the GSE site the documents certifying they respect all necessary requirements and priority criteria. The complete list of the digital documentation to be transmitted in all different cases is available in the “Operating Rules for Applying to the Registers and Auctions“.

There are 7 calls for applications to the registers and/or auctions, with the following deadlines:

Online applications can only be sent through the FER-E Portal during each call’s opening period, which are listed above.

Successful applicants to the Registries or to the Auctions must request access to the incentives within 30 days of the deadline for connecting to the grid, as indicated by Ministerial Decree 04/07/2019 for the different energy sources (ranging from 16 to 51 months, starting from the date of publication of the applicants’ ranking, plus a possible maximum delay of 6 to 8 months).

Exceeding the 30-day deadline for submitting the request to access incentives will provoke a postponement of the commissioning and connection date, the reduction of the period of entitlement to the incentives, the possible reduction of the incentives or forfeiture of the right to the incentives.

Power Quotas

Each of the seven Register or Auction procedures assigns different power quotas, depending on the group to which the plants belong:

In order to maximize the plant construction rate, the decree provides for specific methods of reallocation of the share of unassigned quotas.

Tariffs

The incentives are paid on the net electricity produced and fed into the grid by the plant.

The D.M. 04/07/2019 provides three different tariff definitions:

• the Reference Tariff (Tariffa di Riferimento) is determined, depending on the source and type of plant and its power, by applying:

1. the rates and any reductions envisaged by the Ministerial Decree 23/6/2016 for successful non-photovoltaic plant applicants to the Registers, whose plants are connected within one year of the Ministerial Decree 04/07/2019 coming into effect and that did not benefit from specific priority criteria set by the decree.
2. the tariffs referred to in Annex 1 of the Ministerial Decree 04/07/2019 for all the other plants (see chart below)

• the Offered Tariff (Tariffa Offerta) is calculated by applying to the reference tariff any reductions requested by the successful participant when applying to the Registers or the Auctions, in order to benefit from available priority criteria.
• the Due Tariff (Tariffa Spettante) is calculated by applying the additional reductions envisaged by the Ministerial Decree 04/07/2019 to the rate offered to successful participants ranked in the registers and auctions and subsequently admitted to incentives.

There are two different incentive mechanisms, depending on the power of the plant:

• the All-Inclusive Tariff (TO – Tariffa Omnicomprensiva) consisting of a single tariff, corresponding to the due tariff, which also remunerates the electricity drawn by the GSE;

• an Incentive (I – Incentivo), calculated as the difference between the due tariff and the regional hourly price of the energy, as the generated energy remains at the operator’s disposal.

For systems with power up to 250 kW it is possible to choose either incentive mechanisms, with the possibility of switching from one mode to the other no more than twice during the entire incentive period.

Plants with a power exceeding 250 kW can instead apply only for the Incentive.

All-inclusive and incentive rates are distributed by the GSE starting from the connection date of each plant and for a specific period of time, which is equal to the useful life of the plant itself. The date of commercial connection and commissioning may be chosen by the operator, as long as it is within 18 months from the connection of the plant.

There are also two premium-prizes, respectively, for photovoltaic plants in Group A-2, paid on all the energy produced, and for power plants up to 100 kW on buildings, paid on the net production quota consumed on site:

The aggregates

The decree allows the application to the Registers or to the Auctions by plants of the same group that are presented in aggregate form.

By plant aggregates we mean a group of two or more newly built plants, located on the entire national territory, which apply to the Registers or Auctions as a single plant, based on the overall power of the aggregate.

The overall power of an aggregate, for the purpose of identifying the application method (to the Registers or to the Auctions), is determined by adding the powers of each plant belonging to the aggregate.

The aggregates of several plants with a unit power of more than 20 kW can apply to the registers, as long as the overall power of the aggregate is lower than 1 MW.

Aggregates of several plants with a unit power of more than 20 kW and less than or equal to 500 kW can participate in the Auction Procedures, provided the overall power of the aggregate is equal to or greater than 1 MW.

• Il Decreto “Fer1” 4 luglio 2019  in Gazzetta Ufficiale (pdf)
• Qualenergia.it’s dossier on the Fer 1 decree in Italian with analysis, comments and text

Other articles on the subject:

• Decreto 4 luglio 2019 rinnovabili “Fer 1”, la guida Gse
• Decreto rinnovabili Fer 1, come funzionano i nuovi incentivi al fotovoltaico
• Decreto rinnovabili Fer 1: incentivi e modalità di accesso per l’eolico
• Decreto rinnovabili Fer 1, istruzioni per l’uso: il video del convegno di Elettricità Futura
• Fotovoltaico e amianto nel Fer 1, un incentivo per pochi e non per tutti?
• L’eolico italiano di fronte al Fer 1
• Decreto rinnovabili Fer 1, cosa aspettarsi dalla prima asta?
• Decreto FER 1: premi e restrizioni al fotovoltaico. Un’alternativa alla grid parity?
• Il superammortamento è cumulabile con gli incentivi del nuovo decreto Fer 1?
• Decreto Fer 1, come funzionano gli “aggregati di impianti”
• Decreto FER 1: premi e restrizioni al fotovoltaico. Un’alternativa alla grid parity?