Marketing Renewable Energy in Italy

Abstract

Following the abandonment of nuclear power with a post-Chernobyl referendum, Italian energy policy has created a culture in favor of renewables developed by entrepreneurs and paid for by end users in the form of subsidies. This has led to the success in Italy of incentives for the use of renewables, which in 2015 already met targets set for 2020. Focusing on the Italian case, this chapter initially describes the legal framework and, in particular, the incentive mechanisms and then analyzes the impact of renewables in the vertically integrated Italian electricity market with policy implications. The main results highlight that the massive spread of renewable energy sources (RES) has changed the attitude of policymakers from a command-and-control system to a more simplified and market-oriented approach. In particular, given the past intensive financial efforts, new legislation started to curb new RES investment by setting clear caps on the total financing allotments to the incentive policy. Furthermore, the massive injection of RESs has highlighted the inadequacy of the current electric market design. Finally, the large-scale penetration of RES into everyday life in Italy has increased consumer awareness of green electricity, stimulating a new quest for green electricity and better climate conditions.