Italy offers energy-intensive companies heavily discounted electricity

As reported by foreign energy outlet Montel, Italy plans to offer 20 TWh of electricity to energy-intensive companies at a discounted price through an auction. The price of this electricity is to be 60 EUR/MWh. Compared with current market prices, this is nearly half the price. In return, companies must commit to developing new renewable energy sources (RES) of corresponding capacity.

Italy plans to offer 20 TWh of discounted electricity over a period of 3 years at a price of 60 EUR/MWh. As a source familiar with the situation told Montel, this is an effort by the government to tackle rising energy costs, which are placing a significant burden on local companies. However, it has not yet been announced exactly when the support will begin.

The basic support scheme, albeit without further details, was outlined last Tuesday by Italian Energy Minister Gilberto Pichetto Fratin. Neither the volume nor the price had yet been specified at the time of the announcement. However, the support is to be based on the conclusion of a bilateral contract for difference (CfD).

“We are introducing an instrument aimed at supporting the transition of our industrial sector towards renewable energy sources,” the minister said.

Companies receiving the support must commit to building a new renewable electricity generation facility within 40 months. The installed capacity of the new facility must be at least 200 kW and, over a period of 20 years from commissioning, it must supply to the grid the same volume of electricity as was covered by the support, at a price of 60 EUR/MWh.

The wholesale electricity price for next-year baseload is currently trading at 110 EUR/MWh.