Italy awarded 82pc of available solar photovoltaic (PV) and onshore wind capacity in the first transitional Fer-X auction, energy agency GSE said on Monday.
The scheme aims to subsidise around 12GW of renewable capacity and is open to entrants until the end of 2025. The scheme is geared to encouraging newbuilds, but is also open to repowering solar and wind projects.
GSE awarded 7.7GW of solar PV across 474 plants — against the 8GW available. Only one of these is a repowering project. The weighted average price was €56.825/MWh, and the maximum price awarded was €62.675/MWh.
"From a cost perspective, the lowest bids are technically feasible only in this very specific framework," country manager at clean energy supplier Jinko Power Technology, Felice Lucia, told Argus. "In high-irradiance regions, large-scale projects can now reach a levelised cost of energy around €48/MWh, but only under a stable contract-for-difference mechanism like Fer-X." He added that in a fully merchant scenario — especially with rising solar capture price discounts — projects would not deliver attractive internal rates of return at these levels.
"The auction also reinforces market polarisation — the winners are almost entirely 50–100MW utility-scale plants with compressed capital expenditure levels. Smaller projects simply cannot match these economies of scale," Lucia said.
A total of 72 PV projects, equivalent to 744MW, withdrew their application, but showed interest in the second Fer-X auction, according to the GSE, which is open to PV plants with non-Chinese components. This second round received 156 applications, equivalent to 1.85GW of PV capacity, but the energy ministry set a cap of 1.6GW. The results are expected by 15 December.
GSE suggested last month that participants with bids above the €65/MWh target strike price sign PPAs through its upcoming platform, with GSE acting as guarantor of last resort.
Italy's south and Sicilian zones received a significant share of the approved PV capacity — well above their demand — which is likely to lead to curtailment, according to energy storage system supplier WHES' country manager, Valerio Covicchio. He suggested installing storage systems at industrial sites so that PV energy consumption can be shifted to the evening, saying this could help tackle curtailment.
The concentration of awarded capacity in southern Italy will increase the need for major south-to-north grid reinforcement, pushing grid operator Terna to fast-track upgrades, Lucia said.
GSE awarded 940MW of wind capacity for 29 wind farms out of the maximum 2.5GW available. A third of this consisted of renovation works. The weighted average price was €72.851/MWh, while the maximum price awarded was €77.738/MWh.
"The auction can be considered a true success for GSE," Covicchio said. "A substantial volume of GW was allocated with significant discounts, indicating strong market interest."
The Fer-X auction confirms that "Italy's utility-scale solar sector has reached full industrial maturity", Lucia told Argus.
Winning projects will need to be commissioned within 36 months from the results announcement.
Italy had 41.89GW of solar PV capacity and 13.46GW of wind capacity at the end of October, up by 6.1GW and 574MW, respectively, on the year.
