The new Energy Release Decree introduces new opportunities for energy-intensive companies that use at least 1 GWh of electricity annually. These companies face continuous challenges and rising electricity costs, often jeopardizing their competitiveness.
The Energy Release decree, signed by the Minister of Environment and Energy Security, Gilberto Pichetto Fratin, introduces incentive mechanisms aimed at promoting electricity generation from renewable sources for energy-intensive companies.
Energy Release Decree: Prepayment of Electricity by GSE
One of the innovations introduced by the Energy Release Decree is a mechanism that facilitates the creation of new electricity generation capacity from renewable sources for energy-intensive companies. Article 1 specifies a procedure that allows the Gestore dei Servizi Energetici (GSE) to anticipate electricity, with subsequent repayment by the beneficiary companies.
Through the Energy Release mechanism, energy-intensive companies can request a prepayment of 50% of the electricity volume, along with the corresponding guarantees of origin (“GO”), which will be generated by new renewable energy plants. In return, companies will commit to paying the GSE a fixed price for a period of three years.
Types of Contracts between Energy-Intensive Companies and GSE
Article 2 of the decree describes two types of agreements between energy-intensive companies and GSE:
- Prepayment Contract: A two-way contract that allows for the prepayment of available electricity from GSE, including the transfer of related guarantees of origin for a 36-month period.
- Repayment Contract: A contract that obliges the company to repay the prepayment of electricity, along with the corresponding guarantees of origin, for a 20-year period starting from the commissioning of the new renewable generation capacity. Additionally, Article 2 specifies that the new generation capacity must have a total power of at least twice that specified in the repayment contract and must be realized using photovoltaic, wind, or hydroelectric plants with a minimum power of 200 kW each.
Timelines for the Allocation Procedure
Article 3 of the decree sets the timeline for the allocation of electricity. Within 15 days of the implementation of the operational rules, GSE is required to publish a call detailing:
- The available electricity volume
- The sale price
- Criteria for determining new generation capacity
- Prepayment and repayment contract templates
Expression of Interest
According to Article 4, within 60 days from the opening of the call, energy-intensive end customers must submit their expression of interest to participate in the allocation procedure. The conditions to be met include:
- The requested electricity volume should not exceed the relevant average annual consumption
- The possibility to indicate a minimum electricity allocation threshold under which the customer can waive the allocation.
Guarantees and Contributions
Article 5 specifies that GSE will acquire adequate guarantees from energy-intensive end customers, commensurate with the value of the pre-allocated electricity. To cover these costs, a total contribution of €100,000,000 is foreseen, which can cover up to 50% of the guarantee cost. The cap is €300,000 per company over three years. If requests exceed the available funds, the resources will be proportionally redistributed.
Repayment Contract and Operational Rules
Within 40 months of signing the prepayment contract, the energy-intensive company, or a third party appointed, must sign the repayment contract. The operational rules to access the mechanism will be approved by the Ministry of Environment and Energy Security within 60 days of the decree’s implementation, upon GSE’s proposal.