The European Commission has approved a €23bn Italian State aid scheme designed to support renewable electricity generation, including hydropower, under the EU’s Clean Industrial Deal State Aid Framework (CISAF).

The programme will support the construction of new electricity generation facilities using onshore wind, solar, hydropower and sewage gas technologies. According to the Commission, the projects are expected to add 37.15GW of renewable generation capacity, equivalent to around 48% of Italy’s current renewable energy capacity.

The scheme forms part of Italy’s efforts to increase the share of renewables in gross final energy consumption to 39.4% by 2030. The Commission said the additional capacity would help reduce dependence on energy imports and support the country’s decarbonisation targets.

Support will be provided through two-way contracts for difference (CfDs) lasting 20 years. Under the mechanism, generators receive payments when electricity market prices fall below an agreed strike price and repay the difference when market prices exceed that level.

Most projects will be selected through competitive auctions in which developers bid the strike price required for their projects. Renewable energy plants with a capacity below 1MW will be able to access support directly, with strike prices set administratively by Italy’s energy regulator, Autorità di regolazione per energia reti e ambiente.

The Commission noted that the scheme’s €23bn budget is based on market price assumptions and that actual net support could be lower if electricity prices remain higher than expected.

In its assessment, the Commission concluded that the measure complies with the requirements of the CISAF and includes safeguards intended to prevent overcompensation and maintain market functioning.

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, said: “With this €23 billion scheme, Italy will support the production of renewable electricity from various technologies, such as onshore wind, solar or hydropower, to reach the goals of the Clean Industrial Deal. The scheme will also help Italy reduce its dependence on fossil fuels imports and enhance its renewable energy share.”

The CISAF framework, adopted in June 2025, allows EU member states to provide support for renewable energy deployment and other measures aimed at accelerating the transition to a net-zero economy.

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