Italy's Renewable Energy Incentives Need Overhaul, Enel's Conti Says

Italy should reform government incentives for renewable energy because the current system is too costly, Enel SpA Chief Executive Officer Fulvio Conti said.

A proposed government decree to use auctions to award permits for renewable plants bigger than 5 megawatts, goes in the right direction, Conti said at a conference in Milan today. He said the current system has produced requests that exceed demand.

The Italian government is drafting legislation regulating clean-energy incentives. Spain recently reduced subsidies paid to solar-thermal power plants and some wind farms to limit the cost of electricity for consumers.

Government incentives may cost Italy as much as 5.7 billion euros ($7.8 billion) this year, daily Corriere della Sera said today, citing a report by the country’s energy regulator, Alessandro Ortis. Italy’s incentives are among the highest in the world, Corriere said.

The new rules will eliminate the current system of green certificates, replacing it with feed-in tariffs for small renewable-energy producers and auctions for larger producers, Industry Ministry Undersecretary Stefano Saglia said at the Milan conference. He said in December that Italy wasn’t planning any “dramatic” cuts in clean-energy incentives, preferring a gradual reduction that will help consumers without harming businesses.

Conti said introducing auctions would increase competition and lower energy costs for customers.

“We are happy with the work undertaken by the Parliament and government,” Conti said today. “We hope the reform of the green certificates will herald a long period of regulatory stability.”

To contact the reporters on this story: Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net;

To contact the editor responsible for this story: Will Kennedy at wkennedy@bloomberg.net.

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