Energy Law Newsletter – Italy – October 2026

Introduction

The decree of the Minister for the Environment and Energy Security of 18 June 2026 (the Final FER-X Ministerial Decree), which came into force on 7 August 2026, adopted the support mechanism, as provided for in Articles 6 and 7 of Legislative Decree No. 199 of 8 November 2021, No. 199, for renewable energy plants with generation costs close to market competitiveness. The decree follows on from the Ministerial Decree of 30 December 2024 (the so-called ‘Transitional FER-X’), which ceased to apply on 31 December 2025.

The regulatory framework was finalised in recent weeks: MASE Directorial Decree No. 82 of 7 August 2026 approved Part A of the Operational Rules (general information and preliminary qualification); on 2 October 2026, Part B (expressions of interest, competitive procedures and guarantees) was approved; on 6 October 2026, the GSE published the first five calls for expressions of interest for the first competitive procedure, as well as the guide to the Definitive FER-X Portal and the GIGA Portal.

This newsletter outlines the scope and key features of the new mechanism, the main changes compared with the FER-X Transitional scheme, and the operational timetable for operators and investors.

Scope of application and eligible technologies

The Final FER-X Ministerial Decree applies to solar photovoltaic installations (including agrivoltaic and installations on bodies of water), wind power, hydroelectric power and power generated from gas derived from wastewater treatment processes. Eligible projects include new construction, complete refurbishment, capacity upgrades (not applicable to hydroelectric plants) and partial refurbishment (not applicable to wind and photovoltaic plants). All projects must use new or reconditioned components.

The scheme will cease to apply on 31 December 2030 or, for plants with a capacity of up to 1 MW, 60 days after the date on which a total capacity of 10 GW is reached, if this occurs before 31 December 2030.

Two methods of accessing the support mechanism

The distinction based on capacity, already in place under the Transitional FER-X scheme, remains: plants with a capacity exceeding 1 MW access the support through competitive procedures organised by the GSE, with separate capacity quotas for each technology; plants with a capacity of up to 1 MW have direct access to the scheme by 31 December 2030, subject to a quota of 10 GW.

The period of entitlement to the awarded price remains twenty years from the date the plant enters into operation. The Final FER-X Ministerial Decree applies – with the exception of small plants of up to 200 kW eligible for the all-inclusive tariff – via a two-way contract for difference (‘CfD’) against the zonal price of the Day-Ahead Market: if the difference is positive, the GSE pays the difference; if it is negative, the producer settles the balance or makes a repayment. The electricity produced remains at the producer’s disposal, and the producer is responsible for selling it on the market independently. For plants with a capacity exceeding 1 MW, the CfD mechanism applies to 95 per cent of the energy produced by plants ranked in the eligible positions on the list, whilst the remaining 5 per cent is excluded from this mechanism.

In any case, the CfD applies exclusively to the electricity actually fed into the grid. It follows that the proportion of production affected by curtailment ordered by the grid operator does not benefit from either the market price or the payment provided for under the CfD. This circumstance therefore gives rise to a further volume-related risk, which, for plants with a capacity exceeding 1 MW, is in addition to the risk relating to the 5 per cent of production not covered by the CfD.

Finally, for plants with a capacity exceeding 200 kW, the scheme for guarantees of origin remains in place; these remain at the producer’s disposal and can therefore be sold independently on the market.

Capacity quotas and operating prices

The Final FER-X Ministerial Decree estimates a total capacity quota for competitive procedures of 27.15 GW, broken down by technology as follows: photovoltaic 10 GW, wind 16.5 GW, hydroelectric 0.63 GW, and gas from wastewater treatment processes 0.02 GW. When the 10 GW quota reserved for direct access is added, the new support framework makes a total of 37.15 GW of new renewable capacity available.

The Final FER-X Ministerial Decree distinguishes between three types of operating price, categorised by technology. The operating price is the reference value of the support mechanism for each technology and corresponds to the award price for plants up to 1 MW that have direct access to the mechanism. The higher operating price is the value required to ensure adequate remuneration for plants with a capacity exceeding 1 MW under conditions of particularly high costs and forms the auction base for competitive procedures, against which operators submit their discount percentage. The lower operating price, by contrast, is the value required to ensure adequate remuneration for plants with a capacity exceeding 1 MW under conditions of particularly low costs and is used by the GSE, together with the operating price, to construct the demand curve and to draw up the ranking list. The values for plants with a capacity exceeding 1 MW, broken down by technology, are as follows (€/MWh):

Prices are updated in line with the ISTAT industrial producer price index at the time of publication of each call for tenders and, with 100% indexation, in line with the ISTAT consumer price index between the publication of the call for tenders and the expected date of commissioning; thereafter, indexation is partial, commensurate with O&M costs by technology.

For plants up to 1 MW that join the scheme directly, the award prices are set by ARERA within 90 days of 7 August 2026 (the date on which the Final FERX Decree comes into force), differentiated by technology and size, and updated annually.

Main eligibility requirements

For plants exceeding 1 MW, access to competitive procedures requires: (i) a licence or authorisation for construction and operation (including, where applicable, concessionary licences), with the possibility for technologies other than photovoltaics to participate on the basis of a favourable EIA decision alone (or a determination that the project is not subject to an EIA); (ii) a connection proposal that has been definitively accepted and registration of the plant in Terna’s GAUDÌ system, validated by the network operator; (iii) compliance with performance requirements, environmental protection standards and the DNSH principle, as well as the additional technology-specific requirements set out in Annex 3; (iv) the obligation to participate in the Balancing and Redispatching Market; (v) fulfilment of at least one of the financial soundness requirements (bank certificate or adequate capitalisation, with thresholds decreasing as the investment increases: 10% up to €100 million, 5% between €100 million and €200 million, 2% above that); (vi) commencement of works following the submission of the application to participate in the competitive procedure.

For plants up to 1 MW under direct access, similar construction, performance and environmental protection requirements apply (DNSH and Annex 3), with work not permitted to commence before 7 August 2026; participation in the Balancing and Redispatching Market is optional.

Preliminary qualification, expression of interest and competitive procedures

Participation in the competitive procedures is divided into three distinct phases.

Firstly, the applicant must obtain preliminary qualification from the GSE certifying that they meet the subjective and objective requirements and, where relevant, the priority and award criteria (with the exception of financial soundness, which is subject to a separate preliminary assessment). The GSE issues its decision within 90 days (60 days for the first procedure), excluding any suspensions due to requests for additional information. The CENSIMP code in GAUDÌ must already be validated at the time of application; for technologies other than photovoltaics, if the application is submitted on the basis of an EIA or exemption from EIA, validation may take place subsequently, but in any case before the project becomes operational. The data declared in the qualification (capacity and priority/award criteria) cannot be amended at later stages: to change them, the application must be withdrawn, a new one submitted, and the application fees paid again.

Secondly, qualified applicants must submit, via the Definitive FER-X Portal, an expression of interest for each competitive procedure, specifying the share of capacity for which access is sought. By the deadline for submitting the expression of interest, the provisional deposit (equal to 5 per cent of the investment cost calculated on the basis of the requested capacity, using the following specific investment costs: €900/kW for photovoltaic, €1,420/kW for wind, €3,160/kW for hydroelectric, €3,500/kW for waste gas) and the documentation demonstrating financial soundness must be submitted via the GIGA Portal. Expressions of interest may be submitted up to a maximum of three times (including those submitted under the FER-X Transitional Scheme), except for bids already submitted at a price below the operating price that were not shortlisted, which are not counted towards the aforementioned limit.

Thirdly, eligible applicants take part in the competitive procedure by indicating a percentage discount on the upper strike price. Before drawing up the ranking list, the GSE applies the specific location-based coefficients by market area (adopted by a separate MASE decree) and verifies that bids below the upper strike price cover at least the target quota increased by 5 per cent; failure to do so will result in the exclusion of a capacity equal to 5 per cent of the total offered (except for bids submitted below the lower exercise price). The supply quota available in each procedure is determined by the demand curve and by the minimum, target and maximum quotas set out in Annex 2 to the decree, in accordance with the principle that the quota put out to tender may not exceed 90 per cent of the volumes covered by expressions of interest. In the event of a tie, the following priority criteria shall apply, in the order listed: (a) for photovoltaic installations only, projects on existing installations in agricultural areas without the occupation of new land; (b) installations in suitable areas and acceleration zones pursuant to Legislative Decree 190/2024; (c) the signing of PPAs with a duration of at least ten years; (d) the earlier the date of completion of the application.

The inclusion, amongst the priority criteria, of the signing of PPAs with a duration of at least ten years is likely to further support the uptake of structured PPAs, including for installations eligible for the support mechanism, as well as for those operating on a fully merchant basis.

The final security deposit, amounting to 10 per cent of the investment cost calculated on the basis of the approved capacity, must be paid within 30 days of the publication of the ranking list. Eligible plants must become operational within 36 months (wind and solar photovoltaic), 48 months (hydroelectric – refurbishments and waste gas – new constructions/upgrades; waste gas – refurbishments: 36 months) or 54 months (hydroelectric – new constructions), excluding periods of force majeure. Any delay results in a reduction in the award price of 0.2 per cent per month for the first 9 months and 0.5 per cent for the following 6 months; once this period has elapsed (maximum 15 months), the GSE declares the forfeiture of the support, enforces the final security deposit and, in the event of subsequent readmission to support mechanisms, applies a 5 per cent reduction to the price. Waiving a successful ranking position result in the enforcement of 30 per cent of the security deposit if notified within 6 months of the publication of the ranking list, 50 per cent if between 6 and 12 months, and 100 per cent if after 12 months.

The Final FER-X Ministerial Decree also provides for an accelerated assessment procedure for plants with a capacity exceeding 10 MW subject to a single authorisation, whereby the GSE examines the project in parallel with the authorisation process and issues, within 30 days of authorisation, a statement of suitability that allows access to the next competitive procedure without having to resubmit the authorisation documentation.

Dedicated NZIA procedures

A significant change compared with the Transitional FER-X is the provision of dedicated competitive procedures, pursuant to Article 26 of Regulation (EU) 2024/1735 (Net-Zero Industry Act), for photovoltaic and wind power plants with a capacity exceeding 1 MW. MASE reserves a quota of at least 30 per cent of the maximum annual supply quota for these two technologies under these procedures. In addition to the standard requirements, NZIA plants must meet specific pre-selection criteria (responsible business conduct, cybersecurity and data security, implementation capacity, and contribution to resilience regarding the origin of final products and key components pursuant to Reg. (EU) 2025/1176 and Regulation (EU) 2025/1178) and are assessed on the basis of additional award criteria (project timing flexibility, local impact, interconnections between energy carriers), each carrying a weighting of 5% relative to the financial bid. The call for tenders for the first NZIA procedure identifies the People’s Republic of China as the third country to which the resilience conditions set out in Annex 5, paragraph A.4 of the Ministerial Decree apply.

Combination with other support measures

The scheme may be combined exclusively with: (i) for newly constructed plants only, capital grants not exceeding 40 per cent of the investment cost; (ii) guarantee funds and revolving funds; (iii) tax incentives in the form of tax credits or tax exemptions for investments in machinery and equipment. In such cases, the award price is adjusted downwards in accordance with the criteria set out in Annex 1 of the decree. Access to this support is an alternative to net metering and dedicated feed-in.

The Final FER-X Decree does not contain any explicit coordination between the Final FER-X Ministerial Decree and the Energy Release 2.0 mechanism. However, as clarified by the GSE in a recent FAQ, with regard to the share of electricity produced/fed into the grid by a plant constructed under the Energy Release 2.0 scheme, to which the contract-for-difference arrangement with the GSE does not apply, it is possible to access the FER-X mechanism.

Operating Rules: Part A and Part B

MASE Directorial Decree No. 82 of 7 August 2026 approved Part A of the Operational Rules, drawn up by the GSE, which provides general information on the decree (eligible project categories, criteria for determining nominal capacity, the project’s nominal capacity and the project’s cumulative nominal capacity, subjective and objective requirements for access to the mechanism, priority criteria, procedures for submission and the assessment process for applications for preliminary qualification).

Part A of the Operational Rules specifies, amongst other things, that the transfer of the plant is prohibited following the granting of preliminary qualification and until the contract with the GSE is signed following admission to a qualifying position in the ranking at the conclusion of the competitive procedure. This prohibition does not apply in the event of a transfer of share capital, whether partial or total, of the company holding the preliminary qualification.

As regards the prohibition on commencing works prior to the submission of the application to participate in the competitive procedure, it is clarified that the ‘date of commencement of works’ is to be understood as either the date on which construction works relating to the planned project begin, or the date of the first binding commitment to order equipment or any other commitment that renders the investment irreversible; it is specified that, for this purpose, works on the grid connection infrastructure do not constitute the commencement of works, whilst the construction of the user-side connection facilities does constitute the commencement of works, even if only partial.

The final FER-X Portal for the submission of applications for preliminary qualification has been open since 25 August 2026. For the purposes of participating in the first competitive procedure, by way of derogation from the standard deadline, the deadline for submitting applications for qualification – in order to obtain the outcome in good time – expired on 30 September 2026.

With the publication on 2 October 2026 of Part B of the Operational Rules, the GSE has finalised the implementation framework relating to the expression of interest phase and participation in competitive procedures. Part B sets out the procedures for conducting competitive procedures, the power quotas (minimum, target and maximum) based on the demand curve, the procedure for submitting and assessing expressions of interest, the characteristics and grounds for calling upon provisional and definitive security deposits (bank or insurance guarantee or non-interest-bearing security deposit), and the procedures for drawing up the ranking list and for disqualification. Attached are the draft notices, application forms, guarantee forms and declarations of financial soundness. The GSE has also made available the Guide to the Definitive FER-X Portal and the Guide to the GIGA Portal.

First calls for expressions of interest: operational timetable for the first procedure

On 6 October 2026, the GSE published the first five calls for expressions of interest for the first competitive procedure, relating to: hydroelectric plants (PC_IDR_2026_01), wind farms (PC_EOL_2026_01), photovoltaic plants (PC_FTV_2026_01), NZIA wind farms (PC_EOLNZIA_2026_01) and NZIA photovoltaic plants (PC_FTVNZIA_2026_01). The deadline for submitting expressions of interest via the Definitive FER-X Portal began at 12:00 on 22 October 2026 and closes at 12:00 on 6 November 2026. By the same closing deadline, the provisional deposit and proof of financial soundness must be submitted via the GIGA Portal. By 30 November 2026, the date marking the end of the evaluation period, the preliminary qualification must have been obtained. According to the Operational Rules, the first competitive procedure and the first NZIA procedure will take place in December 2026 (submission of tenders 7–17 December; publication of the rankings 23 December).

The Ministerial Decree of 7 August 2026 approved the timetable for the procedures. Following the first procedure in December 2026, six ordinary procedures are scheduled to take place (March 2027, June 2027, September 2027, December 2027, March 2028 and June 2028) and a further three NZIA procedures (June 2027, December 2027 – limited to wind power – and March 2028). The specific quotas for each individual procedure will be defined by subsequent MASE decrees.

Concluding remarks and next steps

The Final FER-X Ministerial Decree and the related Operational Rules mark the transition from the transitional regime to the fully operational support mechanism for the most mature renewable technologies in Italy, with a timeframe extended to 2030 and a significantly larger overall quota than that provided for by previous support mechanisms. The system’s architecture – preliminary qualification, expression of interest, competitive procedure – and the provision for dedicated NZIA procedures aim to combine decarbonisation objectives, European industrial resilience and siting decisions consistent with grid development.

In the coming weeks, Part C of the Operational Rules – covering the post-award phase – is expected to be published, along with the ARERA resolution on award prices for direct-access plants and on the procedures for applying the new payment schemes in the event of negative prices, overgeneration and scheduled maintenance.

This document, prepared for information purposes only, does not constitute legal advice or guidance. You should consult a professional before making any decisions based on its contents.