June 14 (Renewables Now) - The European Commission (EC) approved on Friday EUR 5.4 billion (USD 6.1bn) in state aid to support power generation from renewables in Italy.
According to the EC, Italy plans to launch a new aid measure to boost the electricity production from onshore wind, solar and other assorted renewable sources. The EUR-5.4-billion pot, available until 2021, will back these projects with a premium paid on top of the market price.
In order to keep the aid at a minimum, the premium will not be higher than the difference between the average production cost for each technology and the market price. In other words, the premium will only serve to cover the negative difference between the market price and production costs.
If the market price exceeds production costs in the future, recipients of the premium will no longer qualify for it and will have to return the additional revenue to the Italian state.
The premium will be determined in a competitive bidding process for all renewable energy installations of more than 1 MW regardless of the technology. Schemes below 1 MW will be picked according to environmental and economic criteria, the EC said.
(EUR 1.0 = USD 1.13)