The use of water for hydropower production in Italy is regulated by the Royal Decree 1775 of 1933, which foresees that the exploitation of public waters for power generation is subject to a concession granted by the competent public authority. The licensee has to pay a fixed annual fee calculated on the basis of the nominal power capacity. Initially, the Royal Decree stated that the state was directly in charge of the concession procedure.
The Italian legislation in the field of electricity production has undergone major revisions and innovations during the 1980s and 1990s. It now offers private companies the possibility of building power plants. Previously, this was a prerogative reserved for ENEL and local utilities. Since 1982, there has been a progressive liberalization in the construction and operation of power plants. Capital funds and incentives are even offered to the producers.
The incentives for hydropower extend for a period of eight years and are based on the avoided cost of fuel and the kind of power plant, which is proposed (reservoir, pondage, or run of the river). There is no distinction between low- and high- head installations in government programs except for administrative aspects. The low-head installations are regulated by regional organizations and the high head ones by the government.
At the same time, there are no government dispositions that impede hydroelectric development, but the government has recently produced authoritative environ- mental legislation, which is more restrictive than before. This indirectly produces negative effects on construction and re-powering programs, except for the more profitable ones.
In 1999, following the devolution of the administrative powers to local authorities, they have become responsible for the whole procedure; moreover, they can even set and additional fee on top of the one set by the state and they can differentiate it according to the nominal capacity.
In 1995, the maximum capacity of hydroelectric power plants operating in Italy had reached 16,390 MW, but yielded the same energy production as in 1963. These data reflect the difficulty of increasing hydroelectric energy production in Italy, which almost reached its saturation level in the early 1960s. This explains the effort devoted to the development of large hydropower plants, especially pumped-storage facilities.
It is important to know that the public administration grants funds for the study of the best way to exploit the available water resources. The use of water resources for drinking and irrigation has priority over the production of electricity using hydropower plants.
The situation in the use of hydropower for the generation of electricity in Italy is rapidly and dramatically changing for three reasons:
• In Italy and in other EU countries, several hydropower concessions are about to expire in the next years;
• Due to fiscal and budgetary constraints, local governments in Italy are willing to
capture a higher part of the rent, by means of a revenue sharing mechanism;
• Even though hydropower is an emission-free technology, it impacts the environment in several other ways (for instance, it negatively affects biodiversity) and the renewal procedures are considered a good opportunity for introducing mitigation measures.
Hydropower Electricity Capacity
Italy has the biggest small hydropower installed capacity at European level. In total, Italy has 14.325 million kW of hydropower capacity installed in 2012, one of the largest within the European region.
Hydropower Electricity Generation
The generation of electricity using hydropower plants accounts, on average, for 15 % of total electricity production in the country. The evolution of the generation
of electricity in Italy using hydropower plants during the period 2008–2012 is shown in Fig. 3.26.
According to Fig. 3.26, the generation of electricity in Italy using hydropower plants increased 22.8 % during the period 2008–2010, but started to decline during the period 2010–2012 (18.1 %). During the whole period 2008–2012, the genera- tion of electricity using hydropower increased 0.06 %. It is expected that the use of hydropower plants for the generation of electricity in Italy will change the cur- rent pattern and start increasing its participation in the energy mix of the country during the coming years.
The use of hydropower plants for the generation of electricity in Italy is by far the most important renewable resource used for this purpose, accounting for 59 % of the total renewables installed capacity and 55 % of total electricity produced.