New government in Italy to reintegrate incentives for geothermal energy

Sasso 2 geothermal plant by Enel Green Power, Tuscany, Italy (source: Volcanex)

Alexander Richter 29 Oct 2019

Italian news report today, that the new government of Italy has confirmed their willingness to reintegrated incentives for geothermal energy. The previous government had made efforts to cut incentives as we reported. There might even be an increase. The incentives are including total fluid re-injection plants, and encouragement for the rebuilding and re-construction of plants already in operation, but with environmental improvements, so Greenreport.

With that the Conte II government aims to encourage the production of electricity from geothermal energy, through the expected Fer 2 decree: the confirmation arrived today in the Chamber, in the Committee on productive activities, where the Ministry of Economic Development responded to the question put forward in recent days by the Tuscan deputies Cenni, Ceccanti, Ciampi and Nardi.

“After months of pressing by the local population, the geothermal municipalities and the Tuscany Region, the first reassurances of the Government had arrived that promised to support the geothermal sector, inserting the incentives in the next decree Fer 2 – explains Susanna Cenni – It is fundamental however to do soon because at stake there is the economic, occupational and social development of entire areas even in our Tuscany, where geothermal energy has 34 power plants for an installed power of 761 MW. The annual production is about 5.9 billion kWh which, overall, satisfies almost 30 per cent of the region’s energy needs and saves over 1 million 400 thousand TOE and 4.1 Mt of CO2 emissions avoided. In these territories, geothermal energy also guarantees 650 direct employees and about 2,000 in related industries and has promoted the development of numerous small and medium enterprises in diversified productive sectors.

After the important reassurances on the reintegration of the Fer 2 incentives obtained from Tuscany to the Ministry of Economic Development (Mise) in July of this year, the government crisis had brought new uncertainty on the subject, on which the Ministry now returns to do some clarity: “The Government intends to support the production of electricity from innovative renewable sources, including geothermal energy”.

According to the Ministry, there are two types of plant considered: plants with a structure that can be traced back to those of plants that are already operational, and plants with total re-injection of fluids. The latter “are still in the development phase, as there is still no such plant in operation in Italy” and it is therefore waiting “that the conditions for authorization mature and proceed to the first realizations “so as to be able to evaluate them in the field. In any case from the Ministry is “aware of the potential of this technology and the interest of the various operators, and therefore it is oriented to support them with the DM Fer 2”.

“Even for geothermal plants with a structure that can be traced back to that of the plants currently in operation – the Ministry adds – the intention is to support them with the subsequent DM Fer 2, however with a push to improve their environmental performance”. In particular, Fer 2 will promote “the construction of geothermal plants with configuration attributable to the plants in operation, and this both with reference to the construction of new plants and to the renovation of existing plants. However, it was agreed that it is appropriate to promote the creation of new structures that substantially improve environmental performance, since technological solutions are now available that allow this result with an acceptable increase in incentives”.

As regards the improvement of environmental performance, the working hypothesis already agreed with the Conte I Government is to take as a model the new law on geothermal energy approved in Tuscany , while to date, the residual incentives put in place to support geothermal energy through the regulatory mechanisms prior to Fer 1 amount to EUR 100.4 million a year , about 2% of all those provided by the Energy Services Operator (Gse) for non-photovoltaic renewable sources. However, new clarifications have not arrived from the Ministry either on the “technological solutions” mentioned or on the proposed “increase in incentives”, for which news is available for the first time.

“In conclusion – the ministry adds – the DM Fer 2 will provide incentives to geothermal plants both with total re-injection of fluids and with traditional setup, but appropriately modified to achieve a substantial reduction of emissions from new plants and from existing plants subject to interventions of remaking”.

Good news for the Tuscan territory in particular, a global leader in geothermal energy for two centuries now, but it is waiting to be translated urgently: “We have already lost too much time with the exclusion of geothermal energy from Fer 1 which was signed in July 2019 – in this regard, the Regional Councilor for the Environment Federica Fratoni commented, during the extraordinary Regional Council that was held in Larderello almost three months ago now – if we had to wait another year for Fer 2 we would lose another year, with an inevitable repercussion on the level of investments, maintenance and supervision that Enel has on its sites”.

Source: Greenreport