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06 August 2018
Regulatory framework for plant variations
Notification duties for photovoltaic plants
Increased power capacity
Repowering is the process of replacing an energy plant's original components with new ones and reconfiguring the layout in order to boost the plant's yield. Due to the inherent degradation of modules and turbines, Italy's current installed generating capacity will gradually reduce over the next 20 years unless it is replaced with new components. As a result, a repowering policy not only aims to increase the deployment of renewable energy sources, but is also necessary to maintain Italy's current levels of low carbon generating capacity.
Since 2003, as a general principle, a 'single authorisation' issued by the relevant region (or province if so empowered by the region) is required to construct, operate and carry out ancillary work to any renewable energy plant.
Pursuant to Legislative Decree 152/2006, as subsequently amended (the Environmental Code), certain categories of project must also undergo a pre-screening assessment, the outcome of which is used to determine whether a full environmental impact assessment procedure will be necessary.
Projects to extend or modify photovoltaic plants are subject to a pre-screening assessment if the proposed changes could have a significant negative impact on the environment.
In addition, and without prejudice to the need to undergo a pre-screening assessment and environmental impact assessment (where required), any changes to an existing project authorised under a single authorisation must be approved by another single authorisation or simplified deemed-consent procedure, depending on the nature of the proposed changes. Material variations to a plant would require the reopening of a new single authorisation procedure, while a simplified deemed-consent procedure would be sufficient to authorise minor variations.
According to Article 5(3) of Legislative Decree 28/2011 (the Romani Decree), 'minor changes', which do not require the reopening of the single authorisation procedure, are defined as changes which imply no amendments to the physical size of devices, the volume of structures and the area where plants are located and their interconnection works are carried out. This definition can be amended by a specific ministerial decree from the Ministry of Economic Development in concert with the Ministry of Environment (however, no such ministerial decree has been issued as yet).
The reopening of a single authorisation procedure is instead required for any material change pursuant to the Romani Decree and the Environmental Code. Basilicata Regional Administrative Court case law has maintained that a material change is evident where the parameters of Article 5(3) of the Romani Decree (ie, "the physical size of the devices, the volume of the structures and the area where the plants and their interconnection works are located") have been changed. To assess the character of a change, it is worth considering Article 5(lbis) of the Environmental Code, which defines 'material variations' as "the amendments to the features or to the functioning or the repowering of a plan, work, infrastructure or project that, in the view of the competent authority, has negative and material effects on the environment".
From a practical standpoint, it may be difficult to distinguish between minor and material changes to an energy plant because the legal definitions are quite vague compared to the reality of the work. Generally, the assessment of the nature of such work is made by a technical adviser. Based on the classification made, the legal adviser may be in a position to indicate the relevant authorisation procedure that should to be followed. The final assessment as to the character of proposed changes lies with the competent authority.
According to Resolution 90/07 of 13 April 2007 – issued by the Authority for Electricity, Gas and Water – and the agreement scheme for the granting of incentive tariffs for the production of energy from renewable energy sources, energy producing companies must communicate the following to Gestore dei Servizi Energetici SpA (GSE), a state-owned body which promotes renewable energy sources:
On 21 February 2017 the GSE, in accordance with Article 30 of the Ministerial Decree of 23 June 2016, issued its guidelines on 'Photovoltaic plants in operation: maintenance and technological modernisation operations' (the DTR Guidance), which regulated the procedures for carrying out maintenance and technological upgrading of photovoltaic plants that benefit from incentive tariffs.
The DTR Guidance applies to the following work to the extent that it has been, or will be, carried out from 21 February 2017 onwards:
Material works include:
Under the DTR Guidance, an energy producer must inform the GSE within 60 days of the completion of any material regulated work by filing the documents detailed in the annexes to the DTR Guidance.
Minor works include:
Under the DTR Guidance, a producer may (but is not required) to notify the GSE of any relevant minor regulated work carried out.
The DTR Guidance sets out specific rules for refurbishment and repowering. Refurbishment includes the maintenance and renovation of existing facilities in order to improve efficiency and restore original performance, while repowering includes interventions to change existing modules and inverters, as well as their connections, in order to increase the installed capacity and annual production.
Before the DTR Guidance was issued, the replacement of modules (or other main components) was allowed within the limit of a plant's nominal power incentivised under the relevant incentive tariff agreement. The DTR Guidance provides that an increase in a plant's nominal capacity (or in the case of multi-section plants, an increase in the nominal capacity of each single section) is allowed on the condition that it does not exceed the following thresholds:
If the repowering of a plant (or a section of a plant) is within the relevant threshold, the producer will be entitled to continue to benefit from incentive tariffs under the relevant agreement in relation to the entire capacity of the plant (or section).
Setting repowering thresholds does not mean that repowering above the relevant threshold is forbidden. The repowering of a plant (or a section of a plant) above a relevant threshold implies that the portion of the plant (or portion of the section) installed above such threshold will not benefit from any incentive tariff. Further, a repowering above the relevant threshold is allowed on condition that the following conditions are met:
Despite the GSE's favourable approach to increased power capacity within the scope of the DTR Guidance's thresholds, due to the vague legislative definition of 'material changes', there is a risk that the competent region (or province) may consider an increased power capacity to be a variation which needs to be authorised by a single authorisation procedure following a pre-screening assessment instead of a variation which may be authorised by the municipality through a quicker simplified deemed-consent procedure.
Given that the regulatory framework is ambiguous, repowering works are innovative and the case law on such matters contains gaps, energy producers seeking to repower their plants are advised not to start the simplified deemed-consent procedure without obtaining prior clearance from the competent authorities.
Going forward, it is hoped that, considering EU and national energy production goals from renewable energy sources and recent guidance from the GSE, the competent authorities will allow increases of power capacity within the DTR Guidance's thresholds to be authorised through a simplified deemed-consent procedure instead of a single authorisation procedure.
For further information on this topic please contact Arturo Sferruzza or Ginevra Biadico at Norton Rose Fulbright Studio Legale by telephone (+39 02 8635 941) or email (firstname.lastname@example.org or email@example.com). The Norton Rose Fulbright Studio Legale website can be accessed at www.nortonrosefulbright.com.
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