MILAN (Reuters) -The European Commission has approved an Italian state aid scheme potentially worth 35.3 billion euros ($38 billion) over the next 20 years to support the increase of electricity produced through renewable sources, the EU said on Tuesday.
The aid will be financed through a levy included in electricity bills and paid by consumers, the EU Commission said, adding the scheme will help Italy to cut carbon emissions.
The subsidies, which will run until end 2028, will support the construction of new plants running on innovative technologies, including geothermal energy, offshore wind power as well as on biogas and biomass.
The plants are expected to add a total of nearly 4.9 gigawatts (GW) of renewable electricity capacity to the Italian electricity system.
"Under the scheme, the aid will take the form of a two-way contract for difference for each kilowatt-hour of electricity produced and fed into the grid, and will be paid for a duration equal to the useful life of the plants," the EU said in a statement.
The projects will be selected through a transparent and non-discriminatory bidding process, where beneficiaries will bid on the incentive tariff - the strike price - needed to carry out each individual project.
Italy last year was the biggest importer of electricity in Europe due to higher than average power costs.
($1 = 0.9193 euros)
(Reporting by Francesca Landini, editing by Giulia Segreti and David Evans)
