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Italy sees 10-fold jump in green capacity awarded on price hike

(Montel) Italy has seen an around 10-fold jump in capacity awarded in its latest green auction compared to the one prior in September due to the rise in strike prices offered, data from state-owned energy services company GSE showed.

Appropriate pricing signals were vital in future auctions and would help foster competition, said wind association Anev in a statement on Friday in light of result, with the strike price around 20% higher in comparison to the previous tender, when adjusted for inflation, according to Montel calculations.

If the current support mechanism offered prices significantly below market value or if it pitted technologies with differing costs against each other, there was a risk of auctions being unsubscribed, it added.

The relatively low number of excluded projects during the tender was another positive sign, indicative of the increasing quality of the projects, said Anev.

The wind association’s comments came after GSE awarded 64%, or 1,041 MW, of the renewable energy capacity offered in the tender, which compared to just 102.7 MW, or 6%, of that allocated in September’s auction.

1.6 GW offered
The latest auction was the thirteenth under the country’s subsidy programme, with the capacity awarded to solar, wind and hydropower projects, with a total of 1,628 MW having been on offer.

The results “were undoubtedly positive”, said Italy’s energy minister Gilberto Pichetto Fratin in a statement.

“We must continue in this direction to strengthen decarbonisation by accelerating production from clean energy.”

He also attributed the strong auction outcome to the higher prices on offer and “the reduction in the rejection rate, due to greater dialogue with the operators”.

Since the GSE launched the first green capacity auction in 2019, around 7.3 GW, or 91%, of the 8 GW on offer had been awarded, it said.

The company would announce the date and the volumes to be offered in the next tender process for new renewables capacity in the coming days.