Italy’s €23bn renewables state aid scheme gets green light

The European Commission has approved a €23 billion Italian State aid scheme to support electricity production from renewable energy.

The scheme will support the construction of about 37.15GW of onshore wind, solar power, hydropower, and sewage gas projects.

According to the Commission, the move will significantly contribute to Italy's decarbonisation goal of reaching 39.4% of final energy consumption from renewable sources by 2030.

Italy is the third largest market for natural gas in Europe (after Germany and the UK) and the second largest importer (after Germany), importing around 95% of the natural gas it consumes.  In 2024, Italy imported almost 59 billion cubic meters (bcm) of gas. The scheme is therefore also intended to reduce electricity prices and dependency on energy imports.

The aid will take the form of variable payments under two-way contracts for difference that provide a bonus for each kWh of electricity produced and fed into the grid, based on a so-called strike price.

The aid will be granted on the basis of bidding process, where beneficiaries will bid on the strike price needed to carry out each individual project.

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Plants with capacity lower than 1 MW can benefit from the scheme directly, without participating in a bidding process. In this case, the strike price is administratively set by the Italian energy regulator

For solar and wind technologies with capacity over 1MW, Italian authorities will organise a separate competitive procedure, where applicants will need to adhere to additional pre-selection Net Zero Industry Act criteria.

The €23 billion budget of the scheme is based on market price estimates, and actual net support may be considerably lower in case of higher-than-expected market prices.

The scheme has been granted under Clean Industrial Deal State Aid Framework (CISAF). On 25 June 2025, the Commission adopted the CISAF to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Clean Industrial Deal.

The CISAF allows various types of aid to be granted to help Member States support the development of clean energy, industrial decarbonisation and clean technology.

Listen to the below episode of the Energy Transitions podcast with Patrizio Donati, Co-Founder and Director at Terrawatt, exploring the restraints hampering Italy's renewables market.