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enero 14, 2025

Italy boosts industry with «Energy Release»: renewable energy at €65/MWh and up to 5.5 GW of new capacity.

The Gestore Servizi Energetici (GSE) launched the new Energy Release program, active from November 14 until February 14, through which Italian industries can apply to receive 69 TWh of electricity backed at a rate of 65 euros/MWh. Mary Polovtseva, Renewable Policy Analyst, analyzes the program's impact on the industry, PPA markets, and Guarantees of Origin markets.
By Emilia Lardizabal

By Emilia Lardizabal

enero 14, 2025
GSE Energy Release

The Gestore Servizi Energetici (GSE) has launched a new program called «Energy Release,» aimed at offering favorable conditions for Italian industry and ensuring renewable energy at prices significantly below the wholesale market, accompanied by the corresponding Guarantees of Origin (GOs).

«The scheme will cover 20% of annual industrial demand, equivalent to 23 TWh, for three years,» highlights Mary Polovtseva, Renewable Policy Analyst at Veyt, in a conversation with Energía Estratégica España. She assures that electricity will be provided at a rate of 65 euros/MWh.

Interested companies can apply until February 14. The program, which will remain in force until December 2027, requires participating industries to build or modernize renewable energy plants within a maximum period of 40 months.

Moreover, they must guarantee the production of at least double the volume of electricity received over 20 years. This represents a commitment to return 138 TWh of renewable energy, equivalent to between 3.5 and 5.5 GW of new installed capacity, according to Veyt’s estimates.

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As for prices, Veyt has published predictions on what this mechanism allows through the Guarantees of Origin.

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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