The scheme contributes to the EU's strategic objectives relating to the European Green Deal while helping to end dependence on Russian fossil fuels and fast forward the green transition.

Italy notified the Commission of its intention to introduce a scheme to support the production of electricity from renewable energy sources. The measure, which will run until 31 December 2028, will be financed through a levy included in the electricity bills of final consumers.

The scheme will support the construction of new plants running on innovative and not yet mature technologies, namely geothermal energy, offshore wind power (floating or fixed), thermodynamic solar, floating solar, tidal, wave, and other marine energy as well as biogas and biomass. The plants are expected to add a total of 4590 MW of renewable electricity capacity to the Italian electricity system. Depending on the technology, the deadline for successful plants to enter into operation varies between 31 to 60 months.

Under the scheme, the aid will take the form of a two-way contract for difference for each kWh of electricity produced and fed into the grid and will be paid for a duration equal to the useful life of the plants. The projects will be selectedthrough a transparent and non-discriminatory bidding process, where beneficiaries will bid on the incentive tariff (the strike price) needed to carry out each project. The reference price for electricity will be calculated as the hourly zonal price, which is the electricity price at the time the energy is fed into the grid and in the market area where the plant is located.

When the reference price is below the strike price, the beneficiaries will be entitled to receive payments equal to the difference between the two prices. However, when the reference price is above the strike price, the beneficiaries will have to pay the difference to the Italian authorities. The scheme will ensure long-term price stability for renewable energy producers by guaranteeing a minimum level of return, while at the same time ensuring that the beneficiaries will not be overcompensated for periods when the reference price is higher than the strike price.