A few days ago, Minister for the Environment and Energy Security Pichetto Fratin spoke at the Chamber of Deputies about grid saturation, PPAs, and Arera. Let’s briefly recap.

Power grid

A regulatory draft for resolving critical issues related to virtual network congestion is expected in the coming weeks. Virtual saturation refers to the high number of requests to connect to the national transmission grid that Terna struggles to manage, which risks slowing down the development of renewables, leading to project delays in the queue.

PPAs (Power Purchase Agreements)

Allow the GSE to sign Power Purchase Agreements with companies for purchasing power from renewable sources and reselling green electricity at competitive prices to industries.

This is done after the GSE has previously purchased the energy, for example, from operators participating in Fer X auctions. PPAs can be a key tool to decarbonize Italy’s industries and enhance their competitiveness, as they help reduce environmental impact and secure affordable, stable energy prices.

The Government’s goal?

To decouple electricity prices from fossil gas prices through solutions based on PPAs or CfDs (contracts for difference) to purchase renewable energy at a long-term fixed price. This would enable end consumers to decarbonize energy consumption and secure lower costs, while producers would also have market-based instruments to stabilize investment financing.

Arera

In the coming months, auction procedures will be defined to select electricity suppliers and establish contractual and financial conditions.