The GSE S.p.A.’s observations in relation to the PPAs development in the transposition of the RED II Directive

Prepared by Energy Team

On 23 September 2021, the Gestore dei servizi energetici – GSE S.p.A. (“GSE”) submitted to the Senate (10th Commission on Industry, Commerce, Tourism and 13th Commission on Territory, Environment, Environmental Assets) its observations on the draft Legislative Decree (currently subject to parliamentary examination) implementing EU Directive no. 2018/2001 (“RED II” Directive).

The GSE commented the draft provisions relating, inter alia, to long-term electricity sale and purchase agreements on renewable sources (so-called Power Purchase Agreements – “PPA”), focusing on the study “Support to elaborate the legislative and regulatory framework to promote Power Purchase Agreements (PPA) in Italy”, prepared together with PwC TLS Avvocati e Commercialisti and PwC Business Services as part of the EU Structural Reform Support Service program.

As highlighted by GSE, the project has been recently finalized and its main output has been the identification of policy proposals and guarantee instruments aimed at encouraging the PPA development in Italy.

One of the measures analyzed highlights the possibility of the introduction, on an experimental basis, of an energy-intensive consumers’ obligation to certify the renewable origin of a minimum percentage of their annual electricity consumption through a PPA with a minimum duration.

In this context, according to the GSE “this obligation could, in the long term, also be a necessary condition for access by the same energy-intensive consumers to compensation mechanisms for the charges incurred, based on the intensity of their use of electricity and their exposure to international trade, with ceilings on the costs eligible for the compensation mechanism (so-called “energy-intensive facility”)”.

To date, the draft decree is still subject to examination by the competent parliamentary committees.

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PwC TLS Avvocati e Commercialisti