A decision has been made to reinstate guaranteed purchases of green certificates in Italy for 2010 since the announcement that the government would stop them halted investment in the sector. However, the government plans to overhaul the certificates once again in 2011 in order to avoid speculation, reports the Wall Street Journal.
“We have gone for a solution that takes into account [promoting] investments as well as introducing reforms,” said industry ministry undersecretary, Stefano Saglia.
With the reinstatement, the Italian government scraps a decree featured in its €25billion austerity budget, which relieved GSE from its role as the buyer of last resort for green certificates issued to support development of cleaner energy production.
The proposals abolishing the guarantee that the GSE would buy the excess green certificates shocked energy players and observers, blocking new financing for renewable-energy projects.
While the certificates were introduced as an incentive, they actually played a key role as bank collateral so long as the GSE guaranteed a floor price. “The market is blocked right now as no bank will give any loans until the [photovoltaic] tariffs and incentives are clarified,” Andrea Fontana, country manager for Italy for Fotowatio Renewable Ventures, said.
The green-certificate system has intrinsic volatilities, compared to a tariff scheme allowing gradual reductions, continued Fontana. “In the photovoltaic sector we are paid per kilowatt-hour produced, and this is better for business-model planning.”
Italy now awaits the news of subsidy cuts, which are expected within the next few days. With these cuts, Italy joins several other European countries, including Germany and France, in making changes to its renewable subsidy program. The Italian government is still undecided on exactly how it will change its feed-in tariff system, yet the revised subsidies will cover the period 2011-2013.