Dominance of wind projects in second CfD auctions highlights troubles of Italian solar PV market, says GlobalData

The ban of solar projects developed on farmlands and Italy’s complicated permit rules are the likely reasons for diminishing interest in solar PV development, says GlobalData, a leading data and analytics company. This puts a strain on the country’s need to simplify authorization, which will aid the growth of the sector.

Somik Das, Power Analyst at GlobalData, comments: “Solar PV projects are often more profitable when built in large capacities on big stretches of inexpensive land. However, there is a scarcity of non-agricultural land in Italy. With no availability of subsidy in agricultural land and complex permitting procedures, the interest of developers has been shifting away from solar PV.”

The second CfD auction for renewable plants was under-subscribed, with wind accounting for the largest share of awards. Wind and solar competed for 500MW, but only around 425MW was awarded. Meanwhile, onshore wind farms were awarded 406MW of capacity, and the remainder was awarded to four solar plants. The first CfD auction had a similar outcome where, out of an offered 500MW, a single solar PV developer won a 5MW project, while wind project developers secured 495 MW.

Das added: “The COVID-19 pandemic has led to a fall in spot prices for electricity, further reducing the prospects of developing solar PV plants supplying directly to industrial consumers in the spot markets. Under these circumstances, Italy’s plan to push solar PV capacity to 50GW by 2030 is likely to experience a setback.”

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