Italy

Abstract

This chapter focuses on the Italian electricity sector and the Italian capacity mechanism. In 2019, following the Commission authorization of Italys capacity mechanism, Italy amended the scheme by introducing more stringent CO2 emissions limits, consistently with the new requirements set out by the 2019 Electricity Regulation. The first tenders under the new scheme took place in November 2019 for delivery in 2022 and 2023. Traditional sources obtained most of the contracted capacity. In 2022, the Italian TSO Terna held the tenders for delivery in 2024. In both tenders traditional sources have been awarded most of the contracted capacity. However, the latest tenders saw storage facilities winning for the first time a significant share of the tendered capacity.. Nevertheless, the tenders have been criticized by renewable generators. This chapter illustrates information on the market and the regulatory framework in Italy, describes the main features of the capacity mechanism and highlights key issues in the Italian electricity market design.