Brussels, 3 October 2012
State aid: Commission finds that prolongation of Italian compensation scheme for interruptibility services in Sardinia and Sicily involves no state aid
The European Commission has authorised under EU State aid rules the prolongation until 2015 of an Italian scheme which remunerates companies for the provision of instant interruptibility services in Italy's largest islands, Sardinia and Sicily. The Commission found, in particular, that these services are still needed and remunerated at market value; therefore the scheme does not constitute state aid in the meaning of the EU rules. However, this finding is based on the current market situation and is therefore limited until the end of 2015.
Instant interruptibility services are typically provided by large electricity consumers, which accept cuts in their electricity supply without prior notice, to the transmission system operator (the TSO). The latter, if need be, may curtail supply to those consumers in order to balance the network and prevent generalised black-outs. These services are a valuable resource for the TSO to ensure the continuity of electricity supply, in particular in areas that encounter structural problems for operating the electric system.
In 2010, the Commission had approved a compensation scheme for those services for the period 2010-2012 in Sardinia and Sicily, in view of the particular situation of these islands and because the remuneration was established by public tender (see case NN24/2010).
Since 2010, several investments and in particular a 1000 MW direct current cable connecting Sardinia to mainland Italy have been carried out. However, Italy submitted that, notwithstanding these investments, the electric systems concerned remain substantially prone to black-outs, namely because of a recent significant increase in unpredictable renewable generation capacity and of delays in other planned infrastructure investments due to lenghty administrative authorisation procedures.
The implementing mechanism of the scheme will remain unchanged. The transmission system operator will auction 500 MW of interruptible capacity for each island, allowing for the participation of operators with a minimum consumption threshold equal to at least 1MW baseload. According to Italy, a large number of operators meet the applicable conditions on both islands.
The Commission's investigation found that there is still a need for instantly interruptible resources. As the remuneration, which is established by public tender, is in keeping with the market value of the service provided, the Commission concluded that the prolongation of the existing scheme does not constitute state aid. This finding, however, results from an analysis of the current situation of the electricity system on the islands concerned and is therefore limited to three additional years, until the end of 2015.
The non-confidential version of the decisions will be made available under the case numbers SA.35119 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.