
Impact on the Guarantees of Origin (GOs) Market
The Energy Release program will significantly impact the Italian GOs market. «In the short term, it could remove up to 23 TWh of GOs annually from local auctions, as the GOs will be allocated and automatically canceled within industrial portfolios,» explains Polovtseva. She notes that this contrasts with the 15.3 TWh sold during the 2024 sessions (out of a total of 43 TWh offered).
«The current oversupply, driven by the carryover of unsold volumes, could intensify,» she points out. However, in the long term, the 138 TWh of renewable energy generated by beneficiary companies could increase the supply of Guarantees of Origin in the market, though they will likely be tied to Power Purchase Agreements (PPAs).
It is estimated that renewable GO cancellations in Italy will drop to 95 TWh in 2025 and gradually rise to 115 TWh by 2027.
While the Italian GO market may experience a downward trend due to Energy Release, the expert believes this could be counterbalanced by new legislation driving demand, such as corporate sustainability directives (CSRD and CSDDD) or renewable hydrogen delegated acts. “Small producers could still find demand in other segments, like corporations,” she notes.
Currently, Italy has two ongoing support schemes for energy-intensive industries: state aid for indirect emission costs, which compensates companies for part of their EU ETS costs via PPAs or GOs, and a discount on system charges, which requires compliance with green conditionality and the use of 30% green energy.
Challenges for Industries and the Future of PPAs
Despite the advantages of Energy Release, industries face several challenges. «The tight deadlines for expressing interest on the GSE portal, initially set between November 2024 and January 2025, have complicated applications,» Polovtseva explains. Although the period was extended until February 2025, finding developers willing to sign PPAs remains a hurdle.
The scheme could also spur growth in the Italian PPA market as it allows intermediaries to build renewable capacity.
However, the analyst stresses that finding developers is one of the sector’s main challenges.
From January to November 2024, 26 PPAs were recorded, compared to 17 during the same period in 2023. However, the contracted capacity was slightly lower (0.88 GW in 2024 versus 0.98 GW in 2023).
According to Veyt, the 138 TWh to be delivered over 20 years equates to between 3.5 and 5.5 GW of new renewable capacity. Polovtseva suggests that companies are likely to choose solar energy (with shorter installation times but higher capacity requirements) or onshore wind (with longer installation times but lower capacity requirements).
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