Italy: The main legislative provisions of the Decree-Law Energy 2

published on 16 April 2024 | reading time approx. 8 minutes

The Italian legislative framework in the energy sector has recently undergone further significant transformations with the approval of Decree-Law 181/2023 converted into Law No. 11 of 2 February 2024, commonly known as D.L. Energia 2.

This decree introduces a series of measures aimed at promoting environmental sustainability, energy efficiency and innovation in the sector, reflecting the country's commitment to an increasingly urgent and necessary energy transition.

Here are the main legislative innovations with reference to the promotion of renewable energies contained in the aforementioned Decree.

Art. 1. Measures to promote RES self-consumption by energy-intensive companies

This article presents strategies to accelerate investments in self-generation of renewable energy in energy-intensive sectors.

In fact, and until 31.12.2030, in the case of several competing applications for photovoltaic and/or wind power plant projects for which the same public surface area needs to be granted, the public administrations, in the public tender phase, will give precedence to projects suitable to meet the energy needs of energy-intensive companies (registered in the special list at the Cassa per i Servizi Energetici e Ambientali - 'CSEA').

The Ministry for the Environment and Energy Security - 'MASE' will define a mechanism for the development of new RES capacity (wind and PV > 200 kW) by energy-intensive companies or by third parties with which these companies sign forward procurement contracts for renewable energy, including through wholesalers. At the request of the energy-intensive enterprise, the GSE may, for the first three years, anticipate the effects of the construction of these plants by selling the renewable energy at a price in line with the costs of the technology. The energy advanced will have to be returned in the following 20 years at the same price. The advance and repayment will take place according to two-way contracts for difference 'CFDs'. RES plants must come into operation within 40 months of the conclusion of the CFD.

Art. 4 - Provisions to encourage regions to host RES plants

From 2024 to 2032, a fund will be introduced to support environmental and territorial compensation and rebalancing for the installation of renewable plants. This fund will be used to promote decarbonisation, foster sustainable local development and accelerate and digitize the authorization process for plants and grid infrastructure. This fund will be fed by revenues from CO2 auctions worth EUR 200 million.

For the first three years, the subsidy of €10/kW/year for new plants above 20 kW (hydro and geothermal excluded) was abolished exclusively for RES producers who acquired the title for the construction of plants in the period between 1 January 2024 and 31 December 2030.

The Fund's resources will be allocated to the Regions according to the degree of achievement of the burden sharing objectives, and for the year 2024 only, the Regions that have provided by law for the identification of the eligible areas, within 180 days from the entry into force of the MASE Ministerial Decree on eligible areas (still to be approved) and in any case no later than 31 December 2024, will be rewarded.

Art. 4a - Novelties concerning revamping and repowering operations

With the article in question, the legislator intended to address the so-called interventions for the renovation and/or upgrading of plants, commonly known as revamping and repowering interventions. It provides for the submission of a preliminary screening to the Environmental Impact Assessment “EIA” (so-called EIA screening) of the interventions of modification, even substantial, for revamping, upgrading or complete reconstruction of plants for the production of energy from wind or solar sources, whose implementation could potentially produce significant or negative environmental impacts; modifications or extensions that comply with any limit values established in the Annexes II and III of the Environmental Code (Legislative Decree 152/2006) are exempted but always in compliance with the new power thresholds as identified in Article 9 paragraph 9 sexies of the DL Energia 2 (see below).

This rule, however, must undoubtedly be read in coordination with the authorisation simplifications already introduced by Decree-Law No. 77 of 31 May 2021, (so-called Simplifications bis Decree, converted into Law No. 108 of 29 July 2021) and Decree-Law No. 17 of 1 March 2022 (so-called Energy Decree, converted into Law No. 34 of 27 April 2022, hereinafter "DL Energia").

In fact, it should be noted that with the amendments made to Legislative Decree 28/2011 (especially to Articles 4,5,6 and 6bis) by the aforementioned Simplification Decree bis and Decree-Law Energia 1, revamping and repowering works that, by definition, are carried out in areas where photovoltaic plants are already located, they are considered suitable areas pursuant to Article 20 of Legislative Decree 199/2021 and they are authorized through:

DILA. In this case, no environmental or landscape assessment is required - regardless of the final power output - when these interventions do not entail an increase in the occupied surface area of the plants and the areas of the interconnection works, including the modification of the technological solution used, falling within the foreseen dimensional parameters. As far as ground-mounted photovoltaic systems are concerned, the DILA applies to interventions that, also as a result of module replacements and modification of the original layout, result in a change in the maximum height above ground of no more than 50 per cent;
PAS, free building activity (attività di edilizia libera) and Autorizzazione Unica. Since these are procedures that do not prejudice any environmental assessment, the proposed intervention may be subject to:

screening EIA, applicable as a general rule to any plant with a capacity exceeding 1 MW (see Annex IV Part II Environment Code); or
EIA, applicable to works listed in Annexes II and III of Part II of the Environment Code or installations referred to EIA following EIA screening or installations in protected areas.

In any case, art. 6 paragraph 9 of Legislative Decree 152/2006 provides for the possibility of submitting a request to the competent authority for a preliminary assessment of the project in order to evaluate the need for an EIA or EIA screening procedure for interventions of modification, extension and/or technical adaptation of the plant.

Art. 4b - Incentives for photovoltaic systems in agricultural areas and for revamping and repowering operations

With the innovations introduced by Art. 4b, photovoltaic systems with modules placed on the ground in agricultural areas can access the state incentives for renewable sources provided for by Legislative Decree 199/2021.

In this regard, priority is given to facilitating participation in the incentives to those who carry out refurbishment work on existing photovoltaic plants in agricultural areas that entail the construction of new plants or new plant sections, separately measurable, on the same area and with the same surface area of agricultural land originally occupied, with an increase in total power.

Art 4c -Support measures for private housing

Article 4c introduced amendments to Article 10f of Decree-Law No. 21 of 21 March 2022, converted, with amendments, by Law No. 51 of 20 May 2022, on measures in support of private construction (Decree-Law Ukraine), providing the following novelties:

the deadlines for the commencement of works envisaged by Article 15 of Presidential Decree No. 380/2001 are extended by 30 months, therefore also for the Single Authorisation (“Autorizzazione Unica”), in the case of authorisations obtained by 30 June 2024 and provided that the deadline for the commencement of works has not expired at the time of the request for extension;
this extension also has consequences with regard to the access to incentives for the GSE in the case of projects that have obtained a useful position in the ranking list, as it determines a postponement of all deadlines, including, in particular, the deadline for the commercial start-up of the plant.

Art. 9 - Measures concerning electricity grid infrastructures and further simplifications for plants from renewable sources with regard to EIA, PAS and Single Authorisation

Paragraph 9e raises from 20 to 25 MW and from 10 to 12 MW, respectively, the power thresholds above which photovoltaic plants located in suitable areas or other specific areas are subject to EIA or to screening EIA.

Paragraph 9f raises from 10 to 12 MW the power threshold below which PV plants are subject to a PAS instead of a Single Authorisation.

Paragraph 9g specifies that the aforementioned simplifications apply to procedures initiated after the date of entry into force of the conversion law.

Paragraph 9 novies expressly provides that, with reference to the concurring opinion of the Ministry of Culture which the Ministry of the Environment and Energy Security acquires for the purposes of the adoption of the EIA measure on projects submitted to the PNIEC-PNRR Commission, in the case of renewable energy projects located in suitable areas, the MIC's opinion is of a mandatory non-binding nature and, once the twenty-day period has expired, the Ministry of the Environment shall adopt the EIA even without the MIC’s opinion.

Paragraph 9i extends to the declarations referred to in Articles 12 (verification of cultural interest) and 13 (declaration of cultural interest) of Legislative Decree No. 42/2004 the scope of the provision according to which the effects of the new declarations do not apply to renewable energy plants whose authorizations procedures have already been finalized with an EIA measure or other authorisation title, prior to the commencement of the procedure preparatory to such declarations.

Finally, Paragraph 9 undecies allows the commencement of the Single Authorisation procedures for renewable energy plants and storage even in the absence of the grid operator's opinion of technical conformity on the design solutions of the grid plants for connection, to be acquired in any case during the proceedings.