Italian Highest Administrative Court Suspends GSE Requests for Feed-In Tariff Reimbursement - McDermott Will & Emery

Italian Highest Administrative Court Suspends GSE Requests for Feed-In Tariff Reimbursement



In Depth

The recent amendments to article 42 of Legislative Decree no. 28/2011, which curtailed the sanctioning powers of the Gestore dei Servizi Energetici S.p.A. (GSE), have produced their first positive results.

By means of orders no. 216, 217, 218 and 220/2018, published on 19 January 2018, the Italian Highest Administrative Court (Consiglio di Stato) granted injunctive relief to the owners of four photovoltaic plants under Conto Energia I and Conto Energia II that the GSE had found to be artificially fractioned. The Consiglio di Stato overruled the Regional Administrative Court’s rejection of the requests for injunctive relief and suspended the effectiveness of the GSE’s decisions to the extent they ordered the restitution of the full feed-in-tariff received since start of operations. The Consiglio di Stato invited the Regional Administrative Court, when ruling on the merits of the cases, to clarify the scope and limits of the recent amendments of article 42 of Legislative Decree 28/2001.

Under the revised article 42, which entered into force on 1 January 2018, the GSE can reduce incentives to operational renewable energy plants by 20 to 80 per cent, depending on the gravity of the assessed violation. Under the partially ambiguous wording of the new legal provisions, it remains unclear whether and under what conditions the new rules apply to GSE decisions made prior to 1 January 2018, and which type of violations will continue to justify a full revocation.

Additional clarity is expected soon not only from the Administrative Courts, but hopefully also from the Ministry of Economic Development, which is charged with developing a list of the violations that will give rise to a reduction in incentives.