Patrizio Donati: We’re quite a young company. 2024 was kind of the year that we entered adolescence and went into adulthood, in the sense that we started pulling together a lot of the things that we needed to actually be able to execute our plan. And it’s the point that we started converting some of our authorisations, into actual projects. We authorised our first solar farm already and we’re going to be building it as soon as the FER X decree comes out, which is very exciting.
This is something that we’ve been building up to for two years, essentially. It took quite a while between one thing and another to get everything ready.
We took on a larger development pipeline by leveraging our connections and doing all the right work with landowners and the technical teams that brought together these projects. And we’re slowly starting to convert these opportunities. Those were the biggest milestones for us.
2025 is going to be a big year because it’s the year that we’re going to actually start building these farms and selling that energy.
In terms of the wider market, 2024 was a very interesting year. In 2023 it was all about accelerate, accelerate, accelerate. More projects, more simplifications, more work to basically help renewables get on the ground. And then 2024 was the year when, instead, the government seemed to want to pull a handbrake and stop everything, one way or another.
There were a series of decrees that came out in 2024, starting from around May/June, which essentially changed everything. There was the Decreto Legge Agricoltura [Agriculture Decree Law] which stopped the development of solar on farmland.; the Testo Unico FER, which they’re currently debating, is coming out soon; the Suitable Areas Ministerial Decree, known as the DM Aree Idonee, has also created a lot of uncertainty. Essentially, all of these steps pulled a very strong handbrake on the development process for renewables across all markets, because they introduced a significant amount of legislative uncertainty and caused many operators to have to scramble to fix their pipelines.
It was kind of a year of contraction. You can ask any developer or even builders, they’ll tell you that since June this year, basically the whole market has been stationary because there was so much uncertainty. Now things are slowly starting to come together, and projects are being transacted, and also will eventually start being built once this Fer X decree comes out. It’s been a turbulent year [in Italy], in the most generous of terms.
Both in your own business/organisation and wider industry, what were the biggest hurdles or challenges or 2024 and why?
The biggest issue in 2024 [in Italy] was the legislative uncertainty. If you say something is banned, fine. Obviously, it’s a problem, but people try to work it, and then they change their plans and they move on. If you say this is allowed, that’s fine, then people move on.
When the Decreto Legge Agricoltura was announced, and a week later it was signed into law, there was no consultation because it was an emergency legislation. It was signed into law immediately, and then there was a period of 60 days before it would be converted into law. Everyone was just stationary, saying ‘we don’t know what’s going to come out of this’, which meant that no one was making any new investments. No one was doing anything.
Similarly, with the DM Aree Idonee they said that now the regions have 180 days to announce their suitable areas [for renewable energy projects], and they can substantially change the existing legislation at their discretion. In that time, everyone was again saying ‘well, we don’t know what’s going to happen’, so we can’t make any investments. This was probably the key issue that we faced over the last year; we don’t know what’s going to happen, so, logically, we’re not going to make any new investments.
That’s why it then pulls a big handbrake on the market. Even worse than an outright ban. Because at least if you ban [something], you know what’s going to happen.
Looking ahead to 2025, what do you foresee as the biggest opportunities, both for your own organisation and the wider market?
The main thing that we’re focusing on is going to be converting these opportunities that we have into real solar farms and selling on some of the projects that we have. The greatest opportunity is going to be to step in to spaces where someother operators got scared and have moved away. That leaves a gap for other operators who are willing to step in and try to find more land on which we can do this simple agriPV, whereby we just have the sheep coming through. That’s our primary objective: to grow our pipeline and try and get more developments.
In terms of the market, the biggest risks and opportunities come from the new pieces of legislation that are coming in. There are now going to be “suitable areas” [under the DM Aree Idonee]. Some regions have started to announce their suitable areas already.
The overall decree has been challenged in the courts, and there will be a hearing when we’ll know if it will be overturned or not. And in the interim, the Concilio di stato has essentially said that the regions cannot make laws that are more stringent than the current national legislation, which is what they’ve been trying to do. For whatever ideological or business reason, they’ve decided that they don’t want to have renewables on their territory.
And the other point is the Fer X decree, which is supposed to be coming out in the coming weeks, which basically establishes a contract for difference (CfD) mechanism to fix the sale price of the energy that you sell from renewable sources. But no one has heard anything yet. That’s basically stopped the entire market because everyone wants to get in on this, but you cannot start construction until the Fer X decree has come out if you want to be included under the scheme.
Finally, the next wave of challenges is going to be finding all the manpower and resources that we need to actually build all of these farms? Right now we’re building them, and already you can’t find any engineers, builders, teams, whatever. And I wonder what’s going to happen in six months time, once the market unlocks. Tt’s going to be impossible to complete these projects.
What would be the single most important thing that could happen in 2025 that would advance either your own organisation or the wider market – or both?
I keep saying the same thing, because it is just the same thing: these pieces of legislation that are currently outstanding. Having certainty is going to be the single biggest thing that’s going to help my firm – is going to help the entire market – because that’s what we need. This just needs certainty. I’m not even talking about accelerating, because at this point, I’ve given up.
We’re going to have to work within the frameworks that we currently have, which are going to help us get to those objectives. With this current legislation the speed is not going to change, but knowing what is going to happen is going to be the best accelerator. In the sense that being able to deploy capital is going to be what unlocks Italy’s potential. Are we going to hit those targets in 2030 at this pace? It’s really not likely, unless something major changes, and I don’t see that happening, honestly.
