Renewables: new incentives on the way – from auctions to grants, how they work and how to access them

For the first auction, the decree of 2 October 2026 sets out three figures: a minimum, a target and a maximum. These serve as benchmarks for determining how much capacity to allocate, taking into account the prices offered and the level of participation. For conventional solar power, the target is 350 MW (with a minimum range of 210 MW and a maximum of 3.5 GW); for Nzia photovoltaic systems, the target is 150 MW (minimum 90 MW and maximum 1.5 GW); for conventional wind power, the target is 1.5 GW (minimum 100 MW, maximum 2 GW); for Nzia wind power, the target is 750 MW (minimum 50 MW and maximum 1 GW); for hydroelectric power, the target is 30 MW (minimum 60 MW and maximum 500 MW). The target is not an automatically allocated quantity, and the maximum represents the upper limit set. To determine the actual tender volumes, the GSE also takes into account the capacity of the expressions of interest, reduced by 10 per cent, within the limits set out in the decree. This ensures competition between projects. The outcome will also depend on the prices proposed by the operators.

For solar power, the operating price is 80 euros per megawatt-hour, with the price exceeding 95 €/MWh. For wind power, the prices are €85/MWh and €95/MWh, whilst for hydroelectric power they are €90/MWh and €105/MWh. For sewage treatment plant gas, the prices are 85 €/MWh and 100 €/MWh. The “upper price” is the tender base price against which the operator submits a bid; the “operating price” serves as a reference for establishing the auction mechanism. Neither of these is a tariff automatically granted to everyone. The applicable prices, adjusted in line with inflation rules, are set out in the tender notices; the winning price depends on the outcome of the auction.

The subsidy is paid for 20 years through a two-way contract for difference. The producer sells the electricity on the market. If the reference market price is lower than the awarded price, the GSE pays the producer the difference; if it is higher, the producer must repay the difference to the GSE. For example, with an awarded price of €70/MWh and a reference price of €50/MWh, the GSE pays €20/MWh. If the reference price rises to €90/MWh, the producer repays €20/MWh. The reference price is the Day-Ahead Market price in the relevant market area and period, assumed to be zero if negative. The calculation relates to the net energy fed into the grid, except in specific cases provided for by the rules.

For projects up to and including 1 MW, calculated in accordance with the rules of the decree, direct access is provided for once the project becomes operational: there is no need to take part in the auction. However, the requirements and the overall limit of 10 GW available must be complied with. For projects under 200 kW, an all-inclusive tariff may be requested: the GSE purchases the energy and pays a tariff that includes both its value and the support payment.

In photovoltaic auctions, the area in which the plant feeds energy into the grid also matters. The “location coefficients” are adjustment factors, expressed in €/MWh, which are added to the bid price solely for the purpose of comparing projects in the ranking. A positive adjustment makes the bid less competitive. If the project is successful, the price awarded remains the winning bid, excluding the adjustment. The application of the adjustment depends on the difference between the installed capacity in individual areas compared with the 2030 burden-sharing targets and the capacity of the projects in the tender. The GSE compares the targets with the new renewable capacity that has come online from 2021 until the closing date of the expression of interest procedure.

In areas that have already reached the target, the adjustment applies to all bids. For those still below the target, a quota is calculated in proportion to the distance from the target: the adjustment applies to bids following the one that exceeds this quota. Until the quota is exceeded, the adjustment is zero. In the North and Centre-North zones, the coefficients are zero. In other zones, the value varies according to the area and the amount of new capacity under consideration. The targets are regional, whilst the coefficients apply to electricity market zones, which may encompass several regions.