Interministerial Price Committee- CIP 6/92

The Inter-ministerial Price Committee Provision (CIP 6/92) in 1992 established rules for energy generation, criteria for electricity prices and obligated ENEL to purchase electricity from independent producers at set prices. The prices were based on avoided costs, representing prices that ENEL would have paid if it had not purchased the energy from third parties. These avoided costs comprise costs of plants including capital, operation and maintece, and fuel costs. A premium is included as an incentive for the higher costs of different renewable energy technologies, but this premium is only paid in the first eight years of plant operation. The price paid to plants is dependent upon the plant type, whether the plant contributes to base or peak load and whether all electricity or only excess electricity is sold to the grid. The incentive is production based, i.e., the more electricity the plant produces, the higher the incentives. The growth of Italys energy production from wind has been attributed to CIP 6/92.

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