Feed-in premium for renewable energy sources other than photovoltaic (Ministerial Decree June 23rd 2016)

The Ministerial Decree June 23rd 2016 updates the support mechanisms for supporting electricity generation by RES-E plants (other than photovoltaic ones) with a capacity of at least 1 kW that were grated through the MD July 6th 2012.
The incentives covered by the Decree apply to new, totally rebuilt, reactivated, repowered/upgraded or renovated plants which will be commissioned on or after January 1st 2013. The new incentive starts to be granted from June 30th 2016 until 30 days after reaching one of the following dates:

 

• December 1st 2016 for all the plants or, for the plants who access directly to incentives (art. 4, paragraph 3), December 1st 2017 or;
• when the indicative cumulative cost of all types of incentives awarded to RES-E plants (other than photovoltaic ones) reaches an overall value of € 5.8 billion per year.

The Decree defines three different ways of access to the incentives, depending on plant capacity and type of project (art. 4):

 

 

• 1. Direct access for new, totally rebuilt, reactivated or repowered/upgraded plants with a capacity not exceeding a given limit (art. 4, paragraph 3) and using specific types of sources or for special projects;
• 2. Enrolment into the Registries for new, totally rebuilt, reactivated or repowered/upgraded and renovated plants 
• 3. Awarding of incentives after participation in a competitive Dutch auctions (electronic auctions held by GSE) for new, totally rebuilt, reactivated or repowered/upgraded plants: the capacity of these plants shall exceed a given threshold (5 MW).

To determine the way of access to the incentives for renovated plants, the capacity to be considered corresponds to the increase in capacity obtained as a result of the project.

 

The total maximum new installed capacity that could be awarded to all technologies through both registries and auctions is 1.370 MW of which 800 MW for new onshore wind capacity.

Between the communication of the registration and the entry into operation the maximum time gap limit depends of the plant technology. A 6 months delay is allowed before losing the registration, but a 0.5% penalty for each month of delay applies on the applicable tariff. After losing the admission, a new successful application leads in any case to a tariff reduced by 15% on the applicable level.

The Decree establishes that the support shall be granted for the net electricity generated by the plant and injected into the grid. Therefore, self-consumed electricity is not eligible for incentives.

The net electricity generated and injected into the grid is the lower value between the net electricity generated and the electricity actually injected into the grid by the plant.

 

The Decree provides for two separate support schemes, based on plant capacity, renewable source used and type of plant:

• A) all-inclusive feed-in tariff (To) for plants with a capacity of up to 500 kW; this capacity is given by the sum of a base feed-in tariff (whose value is defined for each source, type of plant and capacity class in Annex 1 of the Decree) and of premiums, if any (e.g. high-efficiency CHP, emission reductions, etc.).
• B) incentive (l) for plants with a capacity of above 500 kW and for those with a capacity of up to 500 kW not opting for the all-inclusive feed-in tariff; this incentive is given by the difference between the base feed-in tariff – increased by the premiums, if any, for which the plant is eligible - and the hourly zonal electricity price (in the zone where the electricity generated by the plant is injected into the grid). The electricity generated by plants benefiting from the incentive (l) remains the property of the producer.

 

It is worth recalling that the access to the incentives as per the Ministerial Decree of 6 Jul. 2012 is alternative to net metering (“scambio sul posto”) and to simplified purchase/resale arrangements (“ritiro dedicato”).

The value of the base feed-in tariff is the one applicable upon the date of commissioning of the plant. GSE will award the all-inclusive feed-in tariff or the incentive, calculated from the value of the base feed-in tariff, as of the date of entry into commercial operation of the plant. For plants commissioned prior to the closing of the period of submission of applications for participating in the Registries or Auctions and whose ranking position in the relevant Registries does not exceed the applicable cost limit, GSE will grant the base feed-in tariff applicable upon the date of closing of the same period.

The Decree also provides for a number of premiums (Pr) on top of the base tariff for plants which meet specific operating requirements.

The new support period will be equal to the conventional useful life-time of the specific type of plant indicated in Annex 1 of the Decree.

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