Roberto Scasciamacchia, Head of Energy Management and Sales ERG, at "Electricity Market Report 2023"

"It is important to strengthen the role of renewables Power Purchase Agreements (PPAs), one of the cornerstones of ERG's industrial growth. Furthermore, the upcoming new auctions for renewables, the future introduction of auctions for storage, and the renewal of the Capacity Market represent a step forward towards a market more conducive to renewable energies."

Roberto Scasciamacchia, Head of Energy Management and Sales at ERG, spoke during the presentation of the "Electricity Market Report 2023" to discuss the evolution of the electrical system and regulatory framework. The report, developed by Politecnico di Milano - Energy & Strategy, a multidisciplinary team from the School of Management, provides an updated overview of the evolving trajectories of the electrical system.

The revision of the European electricity market design is a potentially significant reform to achieve decarbonization goals by 2030. The aim is to make the electricity market more conducive to renewable development through the promotion of long-term contracts, such as CfDs (Contracts for Difference) – long-term contracts awarded through auctions – and the aforementioned PPAs. Although the PPA market, in particular, seems not to be fully mature yet, ERG has focused on this risk management tool and has promoted its development: currently, 20% of our production is sold through long-term PPA contracts, and our goal is to increase this percentage over the planning period.

Another main instrument to ensure the long-term realization of investments is that of CfDs. However, it is crucial that auction base prices remain aligned with technology costs and include inflation indexing, as envisaged by the draft Decree for renewables, known as DM FERX.

Additional essential steps include the definitive overcoming of the "revenue cap" mechanism that penalized renewable operators last year, the simplification of the plant authorization process, and the resolution of grid connection issues.

The reform of the electrical system must also concern our country, for example, through the new TIDE, potentially favorable for renewables, and decrees for the mentioned FER auctions and storage systems. To reach the 65% renewable energy target (as per the PNIEC objective), storage systems are indeed an essential enabling element.

ERG is determined to play a leading role in the national and international energy transition process through further investments in wind and solar energy. We are the leading Italian wind operator, with an installed capacity of over 3.1 GW in Europe, and we aim to reach 5 GW by 2027.