Italy set to approve decree to extend geothermal concessions

Rome: The Government of Prime Minister Giorgia Miloni is set to meet today, 23 October 2023, to discuss and approve “urgent measures to promote the country’s energy security.” One of the proposals under the decree is set to extend the geothermal concessions that are set to expire in a few years.

The proposal states that the concessions will be extended further to 31 December 2026, instead of the 2025 date that had previously been announced. However, the decree also proposes a further extension subject to the submission and approval of multi-year investment plans.

The plan, which may be requested by the competent authority from the outgoing concessionaire, must include:
The competent authority shall respond with its evaluation within 30 days after the date of presentation of the plan, or within 15 days from the presentation of a modified or integrated plan. A decision will then be made to revise the conditions of the existing concession in terms of duration, in any case not exceeding 20 years.

The Energy Decree also proposes a fund for environmental and territorial compensation and rebalancing with an allocation of EUR 200 million euros for each of the years from 2024 to 2032 to be distributed among the Regions and autonomous Provinces for the adoption of measures for decarbonisation and the promotion of sustainable development of the territory, given the concentration of electricity production plants powered by renewable sources. The costs will be covered by the proceeds deriving from the auctions of carbon dioxide emission quotas.

For power supply, the owners of electricity production plants from renewable sources with a power exceeding 20 kW, who have acquired the title for the construction of the same plants in the period between 1 January 2024 and 31 December 2030, will be required to pay the Energy Services Manager (GSE) an annual contribution equal to 10 euros for each kilowatt of power of the system, for the first three years from the date of entry into operation.

Enel Green Power (Enel) had previously announced nvestment plant of EUR 3 billion for the geothermal sector in Italy, including the construction of two new plants by 2030 with a total installed capacity of 200 MW. However, this investment is contingent on the extension of the company’s existing geothermal concessions in Tuscany beyond the 1-year period that had been already granted at the time.