Italy and EU increase investment in renewable energy

The European Union and the UK are implementing climate policies to accelerate the use of renewable energy. The EU has committed to reducing emissions by 55% by 2030 and raised its renewable energy target to 42.5% by the same date.
EU Member States have set ambitious targets to achieve an installed capacity of 1,316 GW by 2030. These policy initiatives create significant opportunities for investors, enabling them to position themselves in proven renewable technologies with attractive risk-adjusted returns.

Growth in PPAs

The rise in Net Zero commitments has boosted demand for long-term Power Purchase Agreements (PPAs) in renewables, with a record 16.2GW of PPAs signed in 2023 across 272 agreements, up 37% on 2018. This trend is driving market liquidity, with firms such as Capital Dynamics signing more than 30 agreements with investment-grade counterparties including HSBC UK, Sainsbury’s and BP.
Against this backdrop, Italy is well positioned for significant growth in the renewable energy sector, particularly in solar energy. The Italian solar market is set to increase its capacity by 163% by 2030.

Italy’s renewable energy targets

Italy has set ambitious targets to increase the share of renewable energy to 30% of total energy consumption and 70% of electricity production by 2030. The Italian regulatory framework is designed to leverage European and national policies to speed up and simplify the authorisation and planning processes for renewable projects.
Capital Dynamics, an independent asset manager specializing in private assets, including clean energy and private equity, has completed 10 projects in Italy with a capacity of 490 MW. Two newest projects in Sicily with a combined capacity of 170 MW are expected to be operational by Q3 2025. These projects are supported by long-term PPAs.

Investment opportunities

These new projects in Sicily are expected to generate around 324 GWh of renewable energy per year. This development increases Capital Dynamics’ gross annual generating capacity in Italy to around 1 TWh, strengthening its position in Italy’s clean energy mix.
The renewable energy market in Italy and Europe offers attractive prospects for investors thanks to solid support policies, growing demand for sustainable energy solutions and maturing investment infrastructure. Investors can expect an increasingly diverse and resilient energy landscape, offering attractive investment opportunities in the coming years.