The article concerns the regulation of the Renewable Energy Market in Italy, providing a brief overview on the matter at hand.

Although Italian policy on renewable energy is greatly
influenced by EU policy, in Italy there are financial motivations such as the
feed-in tariff[1] and the feed-in premium[2] that provide incentives for the
installation of renewable energy plants and therefore the development of
renewable energy.

In addition, the, as of 2015, abolished Green
Certificate mechanism[3] provided an incentive for the
production of energy from renewable sources. The certificates supplied the
producer with a double economic advantage as they were assigned independently
of the income associated with the sale of electricity.

New measures have been introduced to promote the use
of renewable energy sources. For example, the production of electricity from
renewable sources was addressed by and implemented in Legislative Decree No.
387/2003, which included a simplified single authorisation procedure issued by
regions or provinces to adapt town-planning regulations.

Furthermore, Decree No. 28/2011 details legislation in
relation to the frameworks necessary to reach the targets outlined for 2020 by
the Italian National Renewable Energy Plan. Moreover, the decree implemented
the simplified authorisation procedure, replacing the declaration of commencement
of activity. Additionally, for installations that do not entail a building
permit, only a notice to the Public Administration is mandatory.

The development of Renewable energy is aided by the, in
comparison with conventional production plants, lower connection fees which are
granted for renewable energy sources that produce electricity. The AEEGSI
Resolution No. 281/2005 outlines that the renewable energy producer may also
choose to construct by themselves, free of charge, all the necessary components
for the connection to the network. In addition, renewable energy sources that
produce electricity are provided with priority access to the transmission and
distribution grid.

The Italian Energy efficiency and conservation system
consists of a number of mechanisms. Of particular note are:

i) ‘White
Certificates’ within the energy saving sector which certify energy saving
accomplishments as a result of energy efficiency initiatives;

ii) Funds
for energy redevelopment interventions administered by the Ministerial Decree
of 16 February 2016, including thermal insulation of matt surfaces and the
replacement of traditional air-conditioning systems with the installation of
condensation heat generators or amending the type of windows used;

iii) The
period of tax deductions for energy redevelopment projects has been extended up
to 31 December 2017. Law No 232/2016 implemented this incentive mechanism
whereby owners of buildings can reduce the expenses by 65 per cent and owners
of apartments can reduce the expenses by 70 per cent;

iv) The
European Directive 2004/08/EC was implemented by Legislative Decree No. 20/2007
regarding cogeneration. The Decree introduced the CAR qualification ‘Cogenerazione ad Alto Rendimento’
(high-yield cogeneration) which guarantees that the electricity produced
through high-yield cogeneration can be certified by GSE if the energy
production reaches at least 50MWh/year. The Ministerial Decree dated 5 September
2011 outlines the circumstances in which the CAR qualification provides access
to the White Certificates.

Since 2011, various operators in Italy have executed
smart grid pilot projects under Resolution No. ARG/elt 39/10 and Consultant
Document No. 255/2015/R/EEL. More recently, the MISE commenced a state aid
programme to advocate investments for the building of intelligent electricity
distribution networks. For the advancement of smart grids in Basilicata,
Calibria, Campania, Puglia and Sicily, the Ministerial Decree issued on 19
October 2016 assigned €321,620,225.

The AEEGSI has made recent technological developments
regarding second generation smart metering, enabling the remote control of
electricity, gas and water meters.
Firstly, in the electricity sector, the AEEGSI has supported the
expenses for low voltage electricity metering and has furthermore commissioned
provisions under AEEGSI Resolution No. 646/2016/R/EEL and functional
specifications under AEEGSI Resolution No. 7/2016/R/EEL. Secondly, in the gas
sector, the commissioning requirements of gas meters has been updated up to
2018 under AEEGSI Resolution No. 554/2015/R/gas.

Regarding the outlook and development prospects of the
energy market it is essential to refer to the AEEGSI Resolution No. 3 dated 15
January 2015, whereby the progression of the energy sectors between 2015-2018
specifically requires the establishment of adept and unified electricity
markets, in addition to adaptable gas markets that work within a European
framework. The Resolution requires the creation of competitive retail markets,
an increased accountability of the network operators for infrastructures and
the management of the water sector.

[1] See AEEGSI Resolution No. 369/2016

[2] Feed-in premium tariffs that apply
to the electricity produced by solar thermal plants, in addition to
photovoltaic plants that were established and operating prior to 26 August
2012.

[3] The certificates were introduced by
Legislative Decree No. 79/1999. From 2015 the current Green Certificate
mechanism no longer applies. From 1 January 2016, the producers eligible to
benefit from the mechanism have received a ‘replacement’ incentive provided by
the GSE.