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Clean energy for EU islands

Additional Grid-E Aspects

Management of islands’ electricity systems

Terna S.p.A. (Transmission System Operator) is responsible for the dispatch of electricity on the Italian grid, i.e., it controls the supply of all the ancillary services for its functioning and ensures the system stability. In recent times, the Regulation Authority (ARERA) has begun some experimentation on the provision of ancillary services at the distribution grid level, with a level of coordination between the Transmission System Operator (TSO) and the Distribution System Operator (DSO). 

As for the Regulation Authority resolution ARG/elt 89/09, electricity dispatch on the small non-interconnected islands is delegated to the thermal power plant operators, which are considered “essential plants for the non-interconnected grids”. Terna releases a list of the essential plants for the Italian electrical system on a yearly basis, and the 23 plants of the non-interconnected islands are generally included in it. 

Electricity production - tariffs

In the context of electricity grids in Italy, a special case is given by the 19 non-interconnected small islands, which – as they are operated as insular power grids – have thermal (diesel or biodiesel) power plants which provide electricity production and ancillary services. There are two main cases: 

  • 8 island grids operated by the Enel Group: the distribution grid is operated by e-distribuzione, whereas the thermal power plants are operated by Enel Produzione S.p.A. 
  • 11 island grids operated by small electricity companies: small private companies manage and operate both the distribution grid and the thermal power plants. 

To compensate the significant extra-costs related to the generation of electricity on the small islands, the companies operating the thermal plants of the non-interconnected island grids are beneficiaries of a support scheme replenishing their losses and ensures a level of profitability of investments. Two separate mechanisms are on place for the two group of islands described above. 

Electricity production through renewable energy sources is open to all public and private players in all Italy, including the small non-interconnected islands. Beside participation to the electricity market under certain prerequisites and conditions, there are several possible incentivised remuneration schemes for renewable power plants: 

  • National mechanisms available to all producers of electricity from renewable energy sources: 
  • Photovoltaic, onshore wind and hydro plants: 
  • Plants with installed capacity 1 kW < P < 1 MW: inscription in the registers and allocation of available power according to priority criteria and at a fixed price. The value of the feed-in tariff depends on the technology and on the year of the application, and can be influenced by the hourly energy price on the electricity market. NB: For PV plants, only installations with P>20 kW are eligible. 
  • Plants with installed capacity > 1 MW: participation in auction procedures and allocation of available power on a price basis. The value of the feed-in tariff can also be influenced by the hourly energy price on the electricity market. 
  • Biogas, biomass and bioliquid power plants: access to guaranteed minimum prices defined by the Energy Authority (ARERA). 
  • Schemes for the remuneration of diffuse self-consumption. ARERA has identified seven possible configurations: 
  • Groups of self-consumers of renewable energy acting collectively, which are eligible for a feed-in tariff. 
  • Active customer groups acting collectively. 
  • Renewable energy communities (RECs), which are eligible for a feed-in tariff. 
  • Citizens' energy communities (CECs). 
  • The individual “remote” self-consumer of renewable energy using the distribution network, which is eligible for a feed-in tariff. 
  • The active “remote” customer using the distribution network. 
  • The individual “remote” renewable energy self-consumer with a direct line, which is eligible for a feed-in tariff. 

A partial reimbursement of the network costs also applies for self-consumption under some of the above configurations. 

  • Mechanism available only to producers of electricity from renewable energy sources operating on small non-interconnected islands: the implementation of the Ministerial Decree 14/02/2017 has set specific feed-in tariffs for electricity generation from renewable energy sources on the small non-interconnected islands. The feed-in tariff / feed-in premium depends on the specific island and on the size of the generation plant. Prosumers can decide whether they prefer to make use of the specific feed-in tariffs / feed-in premium for non-interconnected islands or take advantage of the national schemes. 

Electricity consumption - tariffs

As for Art. 11 of the Legislative Decree 08/11/2021 n. 210, all the users of the small non-interconnected islands are identified as vulnerable consumers and can access the prices of electricity which are directly regulated by ARERA. At the current time (Feb 2025), the consumers of the 8 islands operated by the Enel Group can also purchase electricity on the open market, whereas the consumers of the other 11 islands can only purchase electricity at the prices set by ARERA. 

Key references

Relevant authorities and actors

Competent authorities 

The key competent authorities in the management of the electricity sector in Italy and its islands are: 

Relevant actors 

In addition to the competent authorities, the following actors play an important role in the electricity system of Italian islands: