The European Commission has given the green light to a €23 billion Italian state aid programme aimed at accelerating electricity generation from renewable sources, in a
major step aligned with the EU’s broader Clean Industrial Deal agenda.
Approved under the Commission’s Clean Industrial Deal State Aid Framework (CISAF), adopted on 25 June 2025, the scheme is designed to support Italy’s transition toward a net-zero economy while helping the bloc meet its 2030 renewable energy targets.
Large-scale expansion of renewables
Italy notified the scheme to the European Commission as a comprehensive support package for new renewable electricity capacity. The programme will finance the construction of onshore wind farms, solar installations, hydropower plants and sewage gas facilities.
In total, the initiative is expected to deliver around 37.15 GW of new renewable capacity—equivalent to roughly 48% of Italy’s current installed renewable energy base. Authorities say this expansion will play a central role in meeting the country’s goal of sourcing 39.4% of gross final electricity consumption from renewables by 2030.
Contracts for difference at the core
The aid will be delivered through a system of two-way contracts for difference (CfDs), a mechanism that stabilises revenues for renewable energy producers over a 20-year period.
Under the scheme, developers will receive a top-up payment when market electricity prices fall below a pre-agreed “strike price.” Conversely, when market prices exceed that level, producers will be required to repay the difference to the state.
The strike prices will be determined through competitive bidding for larger projects, ensuring cost efficiency and transparency. Smaller installations below 1 MW will be eligible for administratively set prices defined by Italy’s energy regulator, ARERA.
Competitive bidding and industrial policy alignment
For projects above 1 MW, Italy will run separate auctions for solar and wind capacity, with applicants required to meet additional pre-selection criteria linked to the EU’s Net Zero Industry Act (Regulation EU 2024/1735 and Implementing Regulation 2025/1176).
The Commission emphasised that the scheme was designed to be non-discriminatory, market-based and aligned with EU industrial policy objectives.
Market safeguards and budget flexibility
The programme includes safeguards to avoid overcompensation, including provisions that prevent payments when electricity prices turn negative.
Although the headline budget stands at €23 billion, the Commission noted that actual public expenditure could be significantly lower if wholesale electricity prices remain higher than projected.
EU approval under State aid rules
Brussels concluded that the Italian measure is necessary, proportionate and appropriate under Article 107(3)(c) of the Treaty on the Functioning of the European Union. It also found the scheme compliant with sections 3 and 4.1.2 of the CISAF framework.
The decision confirms that the aid is compatible with EU State aid rules, as it supports the development of strategic clean energy capacity while limiting market distortions.
Part of a wider EU strategy
The CISAF framework forms part of the Clean Industrial Deal State Aid Framework (CISAF) strategy, introduced by the European Commission in June 2025 to accelerate investment in clean energy, industrial decarbonisation and net-zero technologies.
It enables Member States to deploy targeted support measures—including renewable energy deployment, industrial electrification, hydrogen adoption, and clean technology manufacturing—until the end of 2025.
The Italian scheme is among the first major large-scale applications of the framework, underscoring the EU’s push to combine climate policy with industrial competitiveness and energy security goals under the broader Clean Industrial Deal.