en.Wedoany.com Reported - The European Commission (EC) has approved a €23 billion (approximately $26.5 billion) aid plan to deploy over 37.15 gigawatts of renewable energy generation capacity in Italy.

Approved under the EU's Clean Industrial Deal State Aid Framework (CISAF), the plan will support the development of onshore wind, solar photovoltaic, hydropower, and sewage biogas projects. According to the European Commission's estimates, these projects could add 37.15 GW of renewable energy capacity, a figure equivalent to approximately 48% of Italy's current total installed renewable energy capacity.

The scheme aims to help Italy achieve its target of renewable energy accounting for 39.4% of total final energy consumption by 2030. The European Commission noted that the measure will also help lower electricity prices and reduce dependence on imported energy.

Support will be provided through 20-year two-way contracts for differences (CfDs). Under this mechanism, developers receive a payment for the difference when the market electricity price falls below an agreed strike price; if the market price exceeds the strike price, developers must return the surplus to the state.

Patrizio Donati, co-founder and Managing Director of independent power producer (IPP) Terrawatt, stated that Italy has abundant projects and capital, and by connecting the two through a long-term framework, projects gain significant cash flow security and bankability. He believes the country now offers one of Europe's largest policy instruments for its renewable energy industry, and that approval on such a scale from Brussels is a clear statement of intent to fund the energy transition. He added that the task for developers is to respond to this trust by building the capacity the scheme seeks to deliver.

The majority of support funds will be allocated through competitive auctions, where developers bid to determine the strike price that makes their projects viable. Italy will establish dedicated auction processes for solar photovoltaic and onshore wind projects with a capacity exceeding 1 MW. Applicants for these tenders must meet additional pre-qualification criteria related to the EU's Net-Zero Industry Act.

Projects with a capacity of less than 1 MW will be exempt from the auction process and can receive support directly. In such cases, the strike price will be administratively set by the Italian energy regulatory authority, Autorità di Regolazione per Energia Reti e Ambiente (ARERA).

The European Commission noted that the €23 billion budget is based on forecast market conditions; if actual electricity prices remain consistently higher than current forecasts, the actual support costs required could be significantly lower. Upon assessment, the Commission determined that the plan complies with CISAF requirements and includes safeguards to prevent overcompensation, including provisions to avoid paying support when electricity prices are negative.

This approval represents one of the largest renewable energy support schemes authorized since the EU adopted the Clean Industrial Deal framework in June 2025.

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