The Solar Energy Market in Italy
March 30, 2017
The Solar Energy Market in Italy
© 2017 DBRS Limited
The Solar Energy Market in Italy
Giuseppe Fresta, Assistant Vice President, Global Corporates
30 March 2017
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Renewable Energy Targets
2020 Target - The EU's Renewable energy directive sets a binding target of 20% final energy consumption from
renewable sources by 2020. To achieve this, all EU countries have adopted national renewable energy action plans
showing what measures they intend to take to meet their renewables targets (including electricity, heating & cooling,
and transport). In 2015, eleven countries – including Italy – have reached their objectives in advance.
2030 Target - EU countries have already agreed on a new renewable energy target of at least 27% of final energy
consumption in the EU as a whole by 2030 as part of the EU's energy and climate goals for 2030.
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The Solar Energy Market in Italy
© 2017 DBRS Limited
The Constitutional Court backs PV Tariff Cuts
In 2014, the so-called “Spalma-Incentivi” Decree - introduced by the Prime Minister Matteo Renzi’s government required solar plant operators to choose between new options to be implemented in relation to their existing FIT
allowances. However, all these options were detrimental to the solar operators business.
On 7 December 2016, the Italian Constitutional Court rejected the appeal filed by four solar energy operators against
the Decree, thus backing the tariff cuts in the state incentives scheme that were applied with retroactive effect.
On 25 January 2017, in its motivations, the Constitutional Court held that the Italian legislator has acted in the general
public interest, balancing two opposite purposes: the state economic support to the renewable energy sector and the
best sustainability of the costs through which such support is granted, borne by the electricity end-users.
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Installed Capacity by Type
As we can see from the charts below, the share of installed capacity of photovoltaic plants in Italy increased from almost
zero in 2005 to 15.7% in 2015.
Installed Capacity by Type in 2005
(Total: 88.2 GW)
0.0 GW (0.0%)
1.6 GW (1.8%)
0.7 GW (0.8%)
21.3 GW (24.1%)
Installed Capacity by Type in 2015
(Total: 120.0 GW)
9.2 GW (7.7%)
0.8 GW (0.7%)
18.9 GW (15.7%)
68.6 GW (57.1%)
22.6 GW (18.8%)
64.6 GW (73.2%)
Thermal
Hydro
PV
Wind
Source: Terna.
Geothermal
Thermal
Hydro
PV
Wind
Source: Terna.
Geothermal
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Installed Capacity by Size
In 2015, the number of PV power plants in Italy
amounted to 688.398, with a total installed capacity of
18,892MW.
The smaller plants (≤ 20kW) represent more than 90%
of all plants.
2015
Installed Capacity (kw)
N.
MW
1≤P≤3
228,267
627
3 < P ≤ 20
398,205
2,942
20 < P ≤ 200
50,233
3,932
200 < P ≤ 1,000
10,566
7,266
In 2015, GSE incentivized - through the various Conto
1,000 < P ≤ 5,000
945
2,319
Energia -
P > 5,000
182
1,807
688,398
18,892
approximately 94% of the Italian installed
capacity (~17.701MW).
Source: GSE.
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Top 20 Utility-Scale Solar Power Plants in Italy
RANKING
CAPACITY (Kw)
MUNICIPALITY
PROVINCE
REGION
YEAR
FEED-IN TARIFF
1
70,556
San Bellino
Rovigo
Veneto
2010
Secondo Conto Energia
2
42,692
Cellino San Marco
Brindisi
Puglia
2010
Secondo Conto Energia
3
24,997
Alfonsine
Ravenna
Emilia Romagna
2011
Quarto Conto Energia
4
24,973
Brindisi
Brindisi
Puglia
2011
Quarto Conto Energia
5
24,171
Canino
Viterbo
Lazio
2011
Terzo Conto Energia
6
24,002
Montalto di Castro
Viterbo
Lazio
2009
Secondo Conto Energia
7
23,800
San Floro
Catanzaro
Calabria
2012
Quarto Conto Energia
8
22,871
Lanuvio
Roma
Lazio
2011
Quarto Conto Energia
9
20,410
Giugliano in Campania
Napoli
Campania
2010
Secondo Conto Energia
10
20,000
Celano
L'Aquila
Abruzzo
2016
Secondo Conto Energia
11
19,369
Trapani
Trapani
Sicilia
2011
Quarto Conto Energia
12
17,884
Porto Torres
Sassari
Sardegna
2011
Quarto Conto Energia
13
15,682
Cosenza
Cosenza
Calabria
2010
Secondo Conto Energia
14
15,000
Villasor
Cagliari
Sardegna
2011
Quarto Conto Energia
15
14,969
San Donaci
Brindisi
Puglia
2011
Secondo Conto Energia
16
14,833
Roma
Roma
Lazio
2010
Secondo Conto Energia
17
14,500
Foggia
Foggia
Puglia
2011
Quarto Conto Energia
18
14,329
Girifalco
Catanzaro
Calabria
2013
Quarto Conto Energia
19
13,448
Priolo Gargallo
Siracusa
Sicilia
2010
Secondo Conto Energia
20
13,412
Troia
Foggia
Puglia
2011
Quarto Conto Energia
Source: GSE.
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Secondary Market
In Italy, as well as in certain other European countries, the falling government support, challenging financial outlook and
increasing competition have led to a significant reduction in new utility-scale solar power plants. However, this has also
created an active secondary market – with a record level of M&A transactions – and a consolidation trend in this very
fragmented industry, where fewer owners hold portfolios of increasing sizes.
DATE
BUYER
SELLER
AMOUNT
PORTFOLIO
14/11/2016
F2i + Enel Green Power
Etrion
€78m+
60MW
08/08/2016
Tages Capital
First Reserve
n/a
157MW
23/03/2016
Sonnedix
Mitsubishi Corporation
n/a
48MW
04/01/2016
Quercus + Swiss Life
Antin
€310m
77.1MW
Source: Thomson Reuters
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Top 10 Largest Portfolios in Italy as of June 2016
Top 10 Largest Portfolios in Italy
Ranking
Name
Portfolio (MW)
Role
1
RTR Energy
334
Independent Power Producer
2
Enel Green Power
200
Utility
3
Graziella Green Power
60
Independent Power Producer
4
FORVEI
60
Investor
5
VEI Green
60
Investor
6
Solar Ventures
50
Independent Power Producer
7
Solar Investment Group
49
Investor
8
Volteo Energie
40
Developer / Owner
9
API Nova Energia
20
Utility
10
SILFAB
16
Developer / Owner
Source: Solarplaza.
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Project Financing
The banking sector continues to fulfill a pivoltal role in financing / refinancing solar assets through traditional project
lending products. However, project bonds to refinance renewable power portfolios are becoming increasingly
popular since the inaugural €85m issue in 2014 to refinance Antin Solar’s 77MW solar portfolio (later sold to Quercus
and Swiss Life and renamed Azienda Solare Italiana). Below is a short list of the most recent bond issues:
DATE
ISSUER
AMOUNT
PURPOSE
14/03/2017
Econergy Renewable 1
€12m
Acquisition
19/12/2016
Azienda Solare Italiana
€125m
Refinancing
14/12/2016
Sonnedix Italia
€95m
Refinancing
29/07/2016
TS Energy Italy
€40m
Refinancing
Source: Thomson Reuters
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The Solar Energy Market in Italy
© 2017 DBRS Limited
Solar Case Study: TS Energy Italy S.p.A.
Issuer
DBRS Rating
Project
Capacity
PPA Counterparty
PPA Maturity
COD
Debt Size
Issuance Date
Maturity Date
Minimum DSCR
Reserves
Covenants
Other Feautures
TS Energy Italy S.p.A.
BBB (low) / Stable
39 photovoltaic plants in nine different regions of Italy
43.3 MW
Gestore dei Servizi Energetici S.p.A. (GSE)
Feb-32
Jun-12
€40.0 million
Aug-16
Jun-32
1.64x (P90)
Debt Service Reserve Account (DSRA) of 50% of the next 12 months debt
6-month O&M reserve
Panel & Inverter Reserve Account funded annually
Distribution DSCR of 1.2x
Cash Sweep Mechanism
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The Solar Energy Market in Italy
© 2017 DBRS Limited
The Political Risk in Italy
Carlo Capuano, Assistant Vice President, Global Sovereigns
30 March 2017
12
The Solar Energy Market in Italy
© 2017 DBRS Limited
The Political Risk in Italy
Polls
State intervention in the RES sector
High uncertainty in the Political environment
35
35
30
30
25
25
FI
20
20
15
15
10
10
5
5
0
0
FdI
AP
MDP
CP
Others
11 jan 16
21 jan 16
1 feb 16
11 feb 16
18 feb 16
1 mar 16
12 mar 16
20 mar 16
30 mar 16
11 apr 16
20 apr 16
3 may 16
13 may 16
19 june 16
27 june 16
7 july 16
21 july 16
4 aug 16
7 sep 16
17 sep 16
2 oct 16
12 oct 16
23 oct 16
9 nov 16
27 nov 16
11 dec 16
19 dec 16
15 jan 17
24 jan 17
3 feb 17
14 feb 17
22 feb 17
2 mar 17
12 mar 17
20 mar 17
Italy and the EU
LN
SI
Timing of the elections (unlikely before 2018)
Electoral Law
PD
Source: Several pollsters, average last 4 observations, as of 24 March 2017.
M5S
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Thank You
Valentino Daprile
Senior Vice President, Global Corporates
+44 (20) 3356 1520
[email protected]
Giuseppe Fresta
Assistant Vice President, Global Corporates
+44 (20) 3356 1539
[email protected]
Carlo Capuano
Assistant Vice President, Global Sovereign
+44 (20) 7855 6670
[email protected]