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Reduction of the GSE's sanctions for renewable energy plants: Italian law update

12 January 2018
New regulations are now in effect in Itay relating to the activities of the GSE and to the behaviour of the operators towards the GSE. Our energy experts in Italy take a closer look at the GSE Guidelines for the operation of plants other than PV plants.

Reduction of the GSE's sanctions

On 23 December 2017, the Italian Parliament has approved the "2018 Financial Statements Law" (the Act"), which came into force on 1 January 2018.

The Act directly affects the administrative powers granted to the government energy agency, the Gestore dei Servizi Energetici (or 'GSE'). In particular, the Act amends article 42 of the Legislative Decree no. 28/2011, which addresses the sanctioning powers of the GSE, by:

(i) introducing the principle of proportionality of sanctions. Where Renewable Energy Source (RES) plants are found to be violating one or more requirements entitling them to a renewable energy incentive, the GSE will no longer be able to automatically and fully revoke these incentives.  Instead, the GSE will only be able to reduce them to a rate between 20% and 80%, according to the gravity of the violation; 

(ii) decreasing incentives reductions by a third in cases where a plant owner willingly discloses any violation under a renewable energy incentive scheme before a GSE inspection; and

(iii) assigning to the Ministry of Economic Development the responsibility of creating and releasing a detailed guideline, establishing the incentive reduction percentages relevant to each violation.

This legal development implements the principle of proportionality in the RES sector. This concept was already introduced by the Italian Constitutional Court, in February 2017, in relation to an automatic ten year incentive exclusion due to false declarations.

Following the issuing of a detailed list of violations and corresponding incentive-reduction rates, prudent operators (or investors) will be able to assess their risks and evaluate - before a GSE inspection – the advantages of voluntary disclosing a violation.

GSE Guidelines for the operation of RES plants other than PV plants

On 20 December, the GSE published the Guidelines for the operation of renewable energy plants (other than PV plants), pursuant to article 30 of the Ministerial Decree dated 23 June 2016. 

The Guidelines also apply to maintenance works which have already been carried out. 
Maintenance works might also entail power capacity increases, provided that such increases do not exceed:
(i) 5% for plants of nominal power up to 20 kW; and 
(ii) 1% for plants of nominal power above 20 kW.

Contacts

As most of the renewable energy investments undertaken in Italy over the last few years benefit from GSE incentives schemes, the importance of these new regulations should not be underestimated.

If you have any questions, or need assistance, please feel free to contact our leading energy partner or counsel:

Michele Cicchetti
DWF (Italy) Managing Partner
+39 0230317999
michele.cicchetti@dwf.law

Guglielmo Fabbricatore
DWF (Italy) Counsel - Energy Department 
+39 0230317999
guglielmo.fabbricatore @dwf.law

 

 

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