1. BUSINESS and POLICY BB1: Leading EU markets: achieving the vision Wind Energy in Italy: policy framework, incentives, industry and market development Luciano Pirazzi ENEA luciano.pirazzi@enea.it

2. Policy framework (1) Legislative Decree 79/99, in force since 1999 Mandatory RES ( renewable energy sources) quota and Tradable Green Certificates (TGCs) Legislative Decree 387/03 Implementing RES Directive 2001/77/EC Renewable Energy Position Paper Presented in Brussels by the Italian government in September 2007

3. Policy framework (2) 2008 Financial Law (Law 244 of 24 December 2007) Deliberation ARG/elt 99/08 issued by AEEG (the Regulatory Authority for Electricity and Gas) on 23rd July 2008 Ministerial Decree issued on 18th December 2008 Incentives on electricity produced from RES

4. Renewable Energy Position Paper Potentials for Annual Production of RES Electricity 2005 2020 Power (MW) Energy (TWh) Power (MW) Energy (TWh) Hydro 17,325 36.00 20,200 43.15 Wind 1,718 2.35 12,000 22.60 Solar 34 0.04 9,500 13.20 Biomass, Landfill 1,201 6.16 2,415 14.50 Gas and Biological Purification Wave and Tidal 0 0.00 800 1.00 Total (MWh/TWh) 20,989 49.87 46,215 104.18

5. 2008 Financial Law Incentives on electricity produced from RES (1) Yearly increase of the mandatory quota of RES electricity: from 0.35 to 0.75 percentage points in the period 2007-2012; Size of all Tradable Green certificates (TGCs) reduced to 1 MWh; RES plants online after 1st January 2008 will get TGCs for a period of 15 years (instead of 12 as older plants), in a number equaling the number of produced MWh multiplied by a coefficient, which is specific for each technology (e.g. 1 for onshore wind, 1.1 for offshore wind);

6. 2008 Financial Law Incentives on electricity produced from RES (2) From 2008 on, the price of TGCs bought from GSE will be calculated as the difference between 180 €/MWh and the annual average market price of electricity (e.g. the calculated price for 2008 was 112.88 €/MWh); the above reference values and coefficients may be updated every three years;

7. 2008 Financial Law Incentives on electricity produced from RES (3) Until Italy has reached its RES electricity target according to Directive 2001/77/EC, Gestore Servizi Elettrici (GSE) must buy all unsold TGCs before their expiration date (3 years from issue), at a price equaling the average TGC price of the previous year. Feed-in tariffs for RES plants up to 1 MW (excluding PV) and wind plants above 200 kW; comprehensive price for wind plants up to 200 kW capacity, it is currently 300 €/MWh

8. Main constraints Complex terrain Italian wind farms are generally located on hills and mountains Grid connection mostly wind farms are built in rural areas on the Southern regions and large islands (Sicily and Sardinia) Permitting procedures Different regional rules and feeling towards wind energy

9. Industrial development (1) Vestas in Italy (3 units) Vestas Italia S.r.l. is responsible for the selling, installation, commissioning and maintenance of the wind farms installed in Italy and other countries (Rome and Taranto) Vestas Nacelle Italia S.r.l. is specialized in the assembly of V52- 850 kW and V90-3 MW turbines (Taranto) Vestas Blades S.r.l. is operating in the construction of the blades for V52 units (Taranto)

10. Industrial development (2) Letwind Since 2008 Leitwind has been set up as a company belonging to the Leitner group First 1.2 MW prototype installed in 2003 Leitwind’s commercial products are two turbines, LTW 70 and LTW 77, respectively of 1.7 MW and 1.5 MW Turbines installed in Italy, Austria, Bulgaria and India

11. Courtesy of Leitwind

12. Industrial development (3) Leitwind 35 LTW77 and LTW80 will be manufactured in 2009 some units will be sold to Italy, France, Bulgaria and Canada Development of a multimegawatt turbine Installation anticipated in 2010

13. Next production of WPR 850/58, 850 kW direct-drive turbine Approval to build a 500 MW, 400 kV merchant electrical line across the Adriatic from Albania to Italy Planned and already authorized 500 MW wind farm in Albania 2 MW, 20 kW and 1.5 kW wind turbine models should be designed in the near future in its factory in Sicily Industrial development (4) Moncada Energy

14. Offshore Installation in 2008 of a small wind turbine on a floating foundation by Blue-H Blue H is currently building the first operational 2.5MW unit in Brindisi, the first in the planned 90 MW Tricase offshore wind farm Other initiatives aimed at setting up offshore wind farms are running along the coasts of southern Italy and Sicily Constraints: difficult permitting procedures, increasing costs and some adverse judgements expressed by local authorities

17. Capacity Factor of Italian Wind Farms by Garrad Hassan Italia S.r.l. Production based on TERNA monthly reports Installed capacity based on ENEA data

18. Wind power capacity at the end of 2008 (MW) 467 (100 ) 795 (211) 209 (53) 687 (168) 946 (260) 188(86) 168 (12) 9 Wind power added in 2008 (in brackets) 1,010 MW 3.5 28 (14) 9.9 (7.35) 13.7 (4.8) 1.5 Total installed 3,736 MW 187 (87) 1.35 (1.35) 12.5

19. Market share of wind turbine manufacturers at the end of 2008 (percentages of total online capacity)

20. Contribution by electricity producers from wind at the end of 2008

22. Thank you for your attention