The European renewable energy industry is underpinned by the Renewable Energy Directive setting three objectives for EU Member States to be reached by 2020, commonly known as the ‘‘20-20-20’’ targets.
In October 2014, the European Council extended the 2020 objectives and agreed on the 2030 climate and energy policy framework for the European Union, setting out domestic greenhouse gas emission reduction targets to be reached by 2030. With the implementation of the Renewable Energy Directive and national policies set out in the NREAPs, most Member States experienced significant growth in installed renewable energy sources over the past several years.
According to the International Renewable Energy Agency (IREN), the size of European renewable industry grew by ~ 5,2% to 489GWp. In the context of achieving the targets set by the EU, Germany, Italy and Spain have been key contributors over the last years.
Europe’s large scale solar assets ownership presents a high fragmentation level and thus strong opportunities for consolidation. The major players active in the secondary market are financial investors, as pension funds and insurance companies, attracted, particularly today in a low interest environment, by the steady, long-term returns available from these regulated assets associated with low operating risk.
Germany has the largest and most developed solar power industry both globally and in Europe with an installed capacity of ~ 40GWp, followed by Italy (~19GWp), UK (~9GWp) and France (~6GWp).
The growth of the sector in terms of capacity installed was followed by a growth of the incidence of RES in electricity market: today Renewable Energy plants satisfy approximately 35% of the gross internal consumptions. The market of renewable energy in Italy reached at the end of 2015 a total installed capacity of 51,5 GWp, more than doubling the installed capacity in 2008 (23,9 GWp).
The growth of the sector was mainly concentrated in a 3-years period (2010-2013) and driven by the regulatory system providing different kind of incentives (e.g. green certificates, feed-in-tariff, inclusive tariffs). The growth of installation was mainly due to the strong development of solar PV and wind sectors, with respectively 18,5 GWp and 5,6 GWp of new plants realized in the last 7 years. PV growth in Italy was remarkable, with over 18 GWp and 550.000 plants installed since 2008. This has been significantly affected by the introduction of the “Conto Energia”, the Italian Feed-in-Tariff (FiT) incentive scheme, which ended in 2013. The estimated size of the Italian Utility Scale Market is ∼7,6 GWp (∼ 5.000 plants, with a 1,5 MWp average size). The Italian Utility Scale Market is highly fragmented, with the 1st player accounting for only 4% of total. The top 10 players in the Italian Utility Scale Market currently own PV plants with an aggregated installed capacity of 1,3 GWp. Only four of them owns a portfolio larger than 100 MWp.
Most of the utility scale PV plants in Italy are still held by the original developers (private equity funds, EPC contractors, etc.)