Brussels (Platts)--2Mar2011/738 am EST/1238 GMT

Italy's draft renewables decree which cuts incentives for wind and solar photovoltaic power could be voted on this week in a form that leaves the renewables industry very unhappy, the industry body Asso Energie Future said late Tuesday.

"The draft decree has remained in its worst format. It has been passed 'as is' by the pre-council meeting of ministers [on Tuesday], which is not good news for the renewables industry," Rosa Pinnirello, spokeswoman for the Italian renewables association, told Platts.

"The decree could be approved this Thursday or Friday, but we're still not sure what it will contain," she said.

According to Asso Energie Future the draft decree sets out a 30% cut on incentives for photovoltaics, introduces competitive auctions for plants producing more than 5 MW, and vetoes ground-based photovoltaics plants greater than 1 MW.

Asso Energie Future's president Massimo Sapienza said the cuts would entail "grave repercussions" for both employment and national credibility.

The 8 GW ceiling on incentives for installed PV to 2020 is "modest" compared with Germany's ceiling of 52 GW, for example, he said.

"An unbalanced maneuver which sets out a ceiling that is too low and with a brusque slowdown of incentives could effectively halt the drive of installed potential capacity to very low levels, blocking the market," said Sapienza.

But Italy's economic development minister Paolo Romani told Italian press Monday that Eur20 billion ($28 billion) has been paid in bills from 2000 to 2010 to add 4% of renewable energy. The burden of renewables incentives is "too heavy," he said.

Italy's state renewable power market operator GSE estimates the country is likely to hit its 8 GW by 2020 solar PV target by mid-2011.

But Asso Energie Future and PV lobby group Grid Parity Project say this is an "inflated" forecast, and that 4.7 GW by mid-2011 is more likely.

"In order to reach the quota foreseen by the GSE you must presume that all requests already presented to obtain incentives in 2010 will transform into operational plants by 2011," they said.

Italy's environment minister Stefania Prestigiacomo, meanwhile, wants a more gradual cut in incentives.

"It's evident that incentives must eventually decrease with the majority being applied in the initial start-up phase and that these will diminish with the growth of the sector. We can't change this," she said in a press statement on Monday.

"But it should be made clear that Italians' energy bills are not higher because of renewables incentives. Incentives for solar contribute less to bills than...nuclear decommissioning," she added.

--Jane Morecroft, newsdesk@platts.com

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