Commission approves €23 billion Italian State aid scheme to support renewable electricity production

This article is brought to you in association with the European Commission.

The European Commission has approved a €23 billion Italian State aid scheme to support electricity production from renewable energy sources, in line with the objectives of the Clean Industrial Deal. This measure will contribute to the transition towards a net-zero economy and reaching the renewable energy target set at EU level for 2030. The scheme was approved under the Clean Industrial Deal State Aid Framework (CISAF) adopted by the Commission on 25 June 2025.

The Italian measure

Italy notified to the Commission, under the CISAF, a €23 billion scheme to support electricity production from renewable energy sources.

The scheme will support the construction of installations that generate electricity using onshore wind, solar power, hydropower, and sewage gas. The plants are expected to add a total of 37.15 GW of renewable electricity capacity, which represents around 48% of current RES capacity in Italy. This scheme will significantly contribute to Italy’s decarbonisation objective of reaching 39.4% of gross final electricity consumption from renewable energy sources by 2030. It will reduce electricity prices and reduce the Union’s dependency on energy imports, in line with the objectives set out in the Clean Industrial Deal and in the REPowerEU plan.

The aid will take the form of variable payments under two-way contracts for difference (‘CfDs’) that provide a bonus for each kWh of electricity produced and fed into the grid, based on a so-called strike price. If electricity market prices are lower than the strike price, the State will pay the difference. If they are higher, the companies will pay back the difference. The CfDs will be in place for a period of 20 years.

The aid will be granted on the basis of a transparent and non-discriminatory bidding process, where beneficiaries will bid on the strike price needed to carry out each individual project.

The Italian authorities will organise a separate competitive procedure for solar and wind technologies with capacity over 1 MW, where applicants will have to respect additional pre-selection Net Zero Industry Act criteria designed in line with Regulation EU 2024/1735 and Implementing Regulation (EU) 2025/1176.

Plants with capacity lower than 1 MW can benefit from the scheme directly, without participating in a bidding process. In this case, the strike price is administratively set by the Italian energy regulator (Autorità di regolazione per energia reti e ambiente).

The €23 billion budget of the scheme is based on market price estimates, and actual net support may be considerably lower in case of higher-than-expected market prices.

The Commission found that the Italian scheme meets the conditions of the CISAF (sections 3 and 4.1.2). In particular, the support will be provided as direct price support, through a two-way CfD, awarded via a competitive bidding process. The measure includes safeguards to ensure markets function properly and avoid compensating producers when market prices are negative.

The Commission concluded that the Italian scheme is necessary, appropriate and proportionate to accelerate the clean transition and facilitate the development of certain economic activities, which are of importance for the implementation of the Clean Industrial Deal, in line with Article 107(3)(c) Treaty on the Functioning of the EU and the conditions set out in the CISAF.

On this basis, the Commission approved the Italian measure under EU State aid rules.

Background

On 25 June 2025, the Commission adopted the CISAF to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Clean Industrial Deal.  

The CISAF allows following types of aid, which can be granted by Member States until 31 December 2025 in order to accelerate the clean energy transition:

• Measures accelerating the rollout of renewable energy and low-carbon fuels(sections 4.1 and 4.2). Member States can set up schemes for investments in all renewable energy sources as well as energy storage, with simplified tender procedures. Specific rules are also provided to accelerate the roll-out of low-carbon fuels.
• Measures allowing temporary electricity price relief for energy-intensive users to ensure the transition to low-cost clean electricity (section 4.5). Before the decarbonisation of the EU’s electricity system fully translates into lower electricity prices, such measures will help to avoid the risk, that due to high costs, industrial activities relocate outside the EU to regions where environmental and climate regulations are absent or less ambitious.
• Measures facilitating the decarbonisation of industrial processes (section 5). Member States can support investments in the decarbonisation of industrial activities to reduce dependency on imported fossil fuels. This can happen through electrification, energy efficiency and the switch to the use of renewable and electricity-based hydrogen which complies with certain conditions, with expanded possibilities to support the decarbonisation of industrial processes switching to hydrogen-derived fuels.
• Measures to ensure sufficient clean technology manufacturing capacity (section 6). Member States can grant investment support for strategic projects in line with the Net Zero Industry Act (such as batteries, solar panels, wind turbines, heat-pumps, electrolysers, and carbon capture usage and storage). This also includes the production of key components and the production and recycling of related critical raw materials.
• Measures to de-risk private investments required for the roll-out of clean energy, industrial decarbonisation, clean tech manufacturing, certain energy infrastructure projects, and projects supporting the circular economy (section 8).

For more information

The non-confidential version of today’s decision will be made available under the case number SA.115180 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.