Market News

 April 20, 2011
Italy proposes halt to nuclear, cap on solar incentives

 Italy looks set to become the latest country to confirm a temporary halt to its nuclear new-build program in the wake of the ongoing crisis at the Fukushima nuclear plant in Japan. However, critics maintain the government is still planning to revive plans for new nuclear plants after the brief moratorium.

The Italian parliament will vote today on extending for at least one year a temporary halt on new nuclear plants that was imposed following the Fukushima crisis.

Economic development minister Paolo Romani said the government was likely to continue the moratorium and would deliver a comprehensive new energy strategy in the coming months. The strategy will cover the next 20 years and will focus on renewable energy.

However, opponents of the government said that the vote was designed to allow the government to postpone a promised referendum on nuclear power scheduled for this summer. Polling suggests almost 90 per cent of Italians are opposed to new nuclear plants. Critics claim the government is seeking to avoid a referendum and will revive its nuclear plans once the current moratorium has lapsed.

According to news agency AFP, Antonio Di Pietro, head of the opposition Italy of Values party, has branded today's vote the "umpteenth government hoax", accusing the government of simply postponing the decision on where to locate new nuclear plants.

Italy is the latest in a series of countries to postpone or scrap nuclear programmes, fuelling optimism that investment in renewables will increase. However, the trend also stokes fears that countries such as German and Italy will become increasingly reliant on coal power over the next decade.

Today's vote comes as the Italian government also considers plans to put a cap on the level of solar incentives available to developers, amid fears the sector could become over-subsidised.

According to a draft document obtained by news agency Reuters, the government wants to cap solar subsidies at between €6bn and €7bn a year by 2016, and cut feed-in tariffs by between 26 and 42 per cent.

However, the cap still represents a significant increase on the €3.5bn a year now distributed through the feed-in tariff scheme and is expected to result in around 23GW of solar capacity being installed by 2016.

The solar industry expressed frustration at the scale and the pace of the proposed cuts to incentives, but the government maintains deep cuts are necessary to track recent falls in the cost of solar technologies.