Provisional FER-X decree: launch of the first award procedure imminent

published on July 3, 2025

On May 20, the implementing provisions for the provisional FER-X were published on the website of the Ministry of the Environment and Energy Security (Ministero dell'Ambiente e della Sicurezza Energetica – MASE), marking the official start of the award procedure for the subsidy.

Publication of the implementing provisions for plants > 1MW

The implementing provisions for the provisional FER-X, which came into force on February 28, 2025, set out the details of access to funding for operators of plants generating electricity from photovoltaics, wind power, hydropower, and residual gases from exhaust gas cleaning, as well as the procedures for submitting expressions of interest in participating in the auctions.

ARERA proposal for tariffs for plants < 1 MW

In addition to the implementing provisions, on June 6, the Regulatory Authority for Energy, Networks, and the Environment (Autorità di regolazione per energia reti e ambiente – ARERA) for tariffs for plants below the megawatt limit (consultation document no. 239/2025/R/EFR), as provided for in Article 4 of the FER-X transitional decree, to which market participants can respond until July 4, 2025.

			Auction price [€/MWh]
Solar power systems		L ≤ 1.000 kW	70
Wind turbines		L ≤ 1.000 kW	91
Hydroelectric power plants	on water pipes	L ≤ 250 kW	145
	on water pipes	250 < L ≤ 1.000 kW	110
	running water	L ≤ 250 kW	180
		250 < L ≤ 500 kW	154
		500 < L ≤ 1.000 kW	136
	from reservoirs with outflow regulation	L ≤ 1.000 kW	90
Plants for generating electricity from residual gases from the purification of residual gases		L ≤ 300 kW	115
		300 < L ≤ 1.000 kW	96

Additional tariffs are also provided for PV systems, depending on the type and location of the system.

Procedure for systems > 1MW

A new feature of the decree is that tariffs can be applied for only a portion of the system's output without having to physically divide the system. Another interesting point is that subsidies are also available for revamping, although in this case the amount of electricity subsidized must be calculated.

In addition to describing the FER-X portal and specifying the required documents, the implementing provisions now stipulate that the following procedure must be followed for each auction and for each type of plant:

There is an initial call for expressions of interest.
There is a second call for bids in the form of an auction.
There is a minimum capacity quota for each auction.
There is a target quota.
There is a maximum capacity quota.
There is a ranking list of the plants that are awarded the contract; this is published within 90 days of the auction's conclusion.

Who can participate in the auctions?

At the same time as the implementing provisions, the GSE published the calls for expressions of interest for each category of subsidized plants. Electronic expressions of interest can be submitted from June 3 at 12:00 p.m. to June 24 at 12:00 p.m., and shortly thereafter, the actual calls for tenders for the auctions should also be opened.

Only plants for which an expression of interest has been previously submitted can participate in the auctions.

When submitting expressions of interest, a processing fee must be paid to the GSE, the amount of which is based on the capacity of the plant. This fee is: €100 for plants with a capacity of up to 50 kW, €180 for plants with a capacity of more than 50 kW and up to 200 kW, €600 for plants with a capacity of more than 200 kW and up to 1 MW, €1,420 for plants with a capacity of more than 1 MW and up to 5 MW, and €2,300 for plants with a capacity of more than 5 MW.

Expressions of interest, which must be submitted via the FER-X portal, must contain the following:

the CENSIMP code and the application code assigned by TERNA when registering the plant in the GAUDÌ system (each code can be used for a maximum of one expression of interest in the same auction);
the type of plant and the type of work to be carried out;
the plant's capacity (nominal capacity, cumulative nominal capacity, the desired capacity share) and, for new buildings, the capacity required to fulfill the obligation to use renewable energy to improve the energy efficiency of buildings in accordance with Art. 26 of Decree Law 199/2021;
the location data of the plant.

As regards the subsequent auctions, which are to be carried out as a second step, the implementing provisions stipulate that the following information and documents must be submitted with the application:

With regard to the deposit – which must be provided in the form of a bank or insurance guarantee or an interest-free deposit – the details of the provisional deposit and the willingness to provide the final deposit must be specified. The provisional deposit amounts to 5 percent of the investment costs envisaged for the realization of the plant capacity (corresponding to the share of the plant capacity for which participation in the auction is sought, multiplied by the specific investment costs for each plant type). The final deposit, on the other hand, amounts to 10 percent of the investment costs envisaged for the realization of the approved plant capacity;
the configuration of the plant must be specified in order to assess its compliance with the provisions of the decree;
any priority criteria applicable to the plant must be listed;
the percentage reduction in the reference tariff must be specified;
other project documents.

Award after the auctions have been held

Based on experience with the last subsidy decree, the auctions do not simply work on the principle of the lowest bids. Rather, corrective mechanisms are in place to prevent excessive prices from being awarded in auctions with low participation, or the lowest possible tariff from always being awarded. The GSE determines the available quota at the beginning and, after the auction, calculates the prices and services offered and creates curves that are then used to award the contract. For this purpose, the decree was structured with, among other things, an operating price or reference price (= price expected by the legislator) and a maximum and minimum operating price. Awarded tariffs cannot exceed the maximum price, but bids can also be below the minimum operating price.

Example PV:

Minimum operating price	Operating price	Maximum operating price
€65/MWh	€80/MWh	€95/MWh

This does not mean that all plants will be awarded contracts until the tendered quota is exhausted. Rather, subsidies will only be granted to plants whose bids lie to the left of the intersection between the demand and supply curves. This mechanism allows the contract price to be kept as low as possible.

As provided for in the implementing provisions, the GSE checks how many plants offer a price that is below the operating price. If these exceed the quota +5 percent, 5 percent of the plants are excluded. The exclusion does not apply to plants for which a tariff below the minimum operating price was offered.

Conclusion

Given the delay in the adoption of the implementing provisions, it is likely that the auction starting in June/July will be the only auction before the expiry of the provisional FER-X (as already announced on May 12 by Alessandro Noce, Director General of MASE).

In this procedure, according to MASE No. 12 of April 1, 2025, the minimum quota is 0.831 GW, the target quota is 1.462 GW, and the maximum available quota is 11.52 GW (out of a total of 14.65 GW allocated for auctions under the provisional FER-X). However, after the expressions of interest are submitted in June/July, the quotas for each type of plant will be recalculated. In the (unlikely) event of a second auction, the remaining maximum quota according to the FER-X decree will therefore total 3.13 GW.

Accordingly, high participation and correspondingly low price offers are expected for the upcoming auction, also in view of the high number of RTB plants for which construction has not begun in recent months in order to wait and see whether a tariff under FER-X can be obtained. However, the rankings are unlikely to be published before the end of 2025, which means that it will not be clear which plants have been awarded contracts (the deadline for submitting applications is 60 days, after which the GSE has 90 days to compile the rankings).

The final FER-X for the years up to the end of 2029, which has yet to be issued and is unfortunately not even available in draft form today, is then expected to include provisions on compliance with the so-called non-price criteria in accordance with the Net Zero Industry Act (EU Regulation No. 2024/1735) and the associated regulations of the European Commission.