With the end of the summer break, Northern Italian regions are set to restart the bidding processes for large-scale hydroelectric concessions.
This comes amidst ongoing discussions about a PNRR regulation that uniquely mandates competitive bidding, project finance, or public-private partnerships for these concessions, a requirement not seen elsewhere in Europe.
Industry players and some politicians are advocating for an amendment to this rule to include a fourth option, allowing the reassignment of concessions to existing operators if they commit to substantial investments.
Environment Minister Gilberto Pichetto Fratin has repeatedly emphasized the need to reopen discussions with the European Commission on this matter.
The recent appointment of Raffaele Fitto as European Commissioner for Budget and Cohesion Policies could be pivotal, as he may now be more inclined to negotiate changes to the PNRR clause.
The regulation requires competitive procedures for expired concessions, particularly for large hydroelectric plants with capacities over 3 megawatts, to be completed by the end of 2023.
Local authorities began moving forward in mid-2023, but legal challenges have stalled progress.
For instance, in Piedmont, a project finance plan by Iren faced legal opposition, but the Superior Court of Public Waters recently dismissed a challenge by Eisacwerck, allowing Piedmont to proceed with reassigning management of several basins and plants.
Similarly, Lombardy is pushing forward despite legal hurdles, with several bids already initiated.
The situation remains complex, with over 4, 600 hydroelectric plants in Italy, but only a few hundred large-scale concessions requiring rebidding.
The regulatory uncertainty has delayed necessary investments in the sector, crucial for enhancing facilities and creating new water reservoirs, especially given rising temperatures and droughts.
The industry hopes for swift government action to engage with Brussels, potentially unlocking over 10 billion euros in investments over the next 10-15 years.
Hydroelectric power has significantly contributed to Italy's renewable energy growth, accounting for over 50% of electricity generation in the first half of the year, aided by early-year rainfall in Northern Italy.
However, the current energy supply stability may not last, with potential disruptions anticipated in the autumn.
Italy has increased electricity imports, particularly from France, but upcoming maintenance on French nuclear plants could reduce supply.
This, combined with halted solar and wind installations, poses challenges for Italy's energy targets.
Introducing a fourth option for concession reassignment could facilitate negotiations for new investments, potentially advancing concession deadlines in exchange for financial commitments from operators.