Bird & Bird and enervis launch a report on the Italian power market 2019 – 2050, with a focus on renewables

By Beate Westlake


International law firm Bird & Bird and power market consultant enervis today launch a report, the "Italian Power Market Outlook 2019-2050", which provides an analysis of the power market and legal framework for investments in renewable power generation technologies in Italy over the next 30 years.

The report includes expert insights from Bird & Bird's Energy & Utilities team in Rome, Milan and London into the national energy strategy, the expected implementation of a new renewable tender system, the rules and market trends for power purchase agreements (PPA) in Italy and the expected framework for conventional generation capacities.

This analysis is supplemented by a long-term scenario calculation of developments in the Italian electricity market by enervis right up until 2050. The market forecast includes results on future electricity prices, capture prices of onshore wind and PV as well as the developments of all relevant generation technologies in Italy. Based on this scenario calculation, the study quantifies the opportunities and risks for investments in new generation technologies, especially onshore wind and PV in the Italian electricity market. Special attention is paid to the quantification of cannibalization effects of these renewable investments as they strongly affect financial viability and returns.

Simone Cadeddu, partner at Bird & Bird in Rome and one of the study's authors comments on the Italian market and the scope of the study: “Despite the uncertainty around when Italy will adopt the FER decree for new renewable tenders, we expect a very dynamic development of the renewable market, especially for PV. Corporate PPAs will play a major role in this and the study "Italian Power Market Outlook 2019-2050" by Bird & Bird and enervis aims to support investors, banks and project developers to better evaluate opportunities around renewables in the Italian market.”

Lars Kyrberg, partner at Bird & Bird in Hamburg and a member of the team leading Bird & Bird’s international Corporate PPA initiative adds:  “We are currently seeing a growing demand and have advised on Corporate PPAs not only in Italy, but also in other European countries including The Netherlands, Spain, Denmark as well as Scandinavia and Australia. Germany is also one of the up and coming Corporate PPA markets and we expect to see more work coming out of this market over the next few years.

Pierpaolo Mastromarini, partner at Bird & Bird in Rome/Milan, head of the Energy and Utilities sector group in Italy and one of the study's authors comments on the Italian market and the scope of the study: "We are delighted to be at the forefront of the Corporate PPA market in Italy and Europe which, combined with our skills in the technology sector, helps us assist our clients to stay ahead of the curve. The PPA market in Italy is a big part of the current technology revolution in the energy sector and it is therefore essential that companies are aware of the risks behind these contractual terms."

The study is part of Bird & Bird’s international Corporate PPA initiative, being led by the co-heads of its Renewables Group, Elizabeth Reid (London) and Sophie Dingenen (The Hague), Lars Kyrberg (co-head of the Energy Network and Transmission Group, Hamburg) as well as Levent Gürdenli (co-head of the Energy Management Group, London).

Tim Steinert, senior consultant at enervis derives some advice for investors in the Italian renewable market from the study: “Our long-term scenario calculations for the study shows that power market revenues for PV plants in Italy will be substantially cannibalized in future: capture rates for PV decrease from close to 100% today to less than 60% in the long run while installed solar capacity increases strongly driven by tenders and merchant investments. This directly affects revenues and needs to be evaluated by investors and banks.”

The 100+ page study offers investors, banks and project developers important decision-making support for engagements in the Italian electricity market and a long-term outlook of power prices and possible revenues for renewable investments. The "Italian Power Market Outlook 2019-2050" can be purchased from enervis ([email protected]).

For more information please contact: Beate Westlake, Senior Public Relations Executive at Bird & Bird.