The Italian Green Certificates market between uncertainty and opportunities

With the overall reform of the electricity industry in 1999, Italy has started the implementation of a new support mechanism for renewable energy sources that is based upon a Green Certificates market. Such certificates will be delivered for 8 years for electricity production to renewable power plants commissioned after 31 March 1999. All the electricity production based on non-renewable energy sources and import have an obligation to cover 2% of its total with Green Certificates. This support mechanism is open to foreign production, but only from countries with reciprocal opportunities for Italian production. The new market has formally started on January 2002, even if some important rules have not yet been defined. This paper describes the new support mechanism, investigates the critical aspects for its activation and shows some possible trends for the quantity of the supplied certificates and their prices in the coming years.