On January 31st, 2014, the Ministry of Economic Development implemented Article 42 of the Legislative Decree 28/2011, by issuing an all comprehensive regulation of inspections for power plants fuelled by renewable energies, and benefitting from feed-in tariffs granted by Gestore dei Servizi Energetici S.p.A. – GSE (hereinafter the “Decree”, published on the Official Journal of the Italian Republic no. 35 of February 12th, 2014).

As implementation of art. 4 of the Decree (“Officers appointed to the survey”) (“Soggetti preposti ai controlli”), on 4th July, 2014, GSE awarded a first tender in order to outsource the “Management of documental inspections pursuant to D.M. 31/01/2014” (“Gestione delle verifiche documentali, ai sensi del d.m. 31 gennaio 2014, al fine di accertare la sussistenza o la permanenza dei requisiti per il riconoscimento o il mantenimento degli incentivi”).

Later, on 7th August, 2015, GSE published a tender entitled “Revision and optimization of the management of the results of the survey activity, pursuant the Decree 31/01/2014 and implementation of a management system integrated with the documental system already set up with eProcs technology” (“Revisione ed ottimizzazione del processo di gestione dei seguiti alle attività di verifica ed ispezione, di cui al DM 31/01/2014, e implementazione di un sistema di gestione integrato con il sistema documentale già realizzato con tecnologia eProcs”). This tender, whose deadline was on September 15th, 2015, was awarded to a company operating in the field of informatics services.

Finally, on June the 10th, 2015, GSE called for new tenders, in order to outsource the “Services of documental inspection and inspections with survey in the power plants fuelled by renewable energies benefitting from feed-in tariffs” (“Servizi di verifica documentale e con sopralluogo sugli impianti fotovoltaici ammessi all’incentivazione in conto”). This tender was then amended, on July 2nd, 2015.

With reference to this tender, on July 16th, 2015, GSE issued a document to clarify the bid-procedure. Such clarifications concern the requisites and the documents necessary to apply to the call.  The offer procedure has been carried out in a negotiated way. As of today the tender does not result awarded to any company yet.

In the next months, therefore, as a result of the tenders previously referred to, it is likely that the inspection activity GSE had been entitled to by the Decree, will start in a systematic way.

Therefore, please find attached to your convenience a brief vademecum for the use of feed-in tariffs beneficiaries.

Introduction.

The inspection procedures regulated by the Decree could be either based on documental inspection without survey, or inspection with survey. In carrying out such sort of inspections (which might even be implemented without any previous notice) GSE could be supported by its subsidiary companies or even by third parties, with specific suitable technical proficiency. Moreover, GSE is entitled to enter into specific protocol agreements with other public authorities for the sake of an effective coordination of the different forms of inspections that need to be practically cross-implemented, provided that each public authority involved keeps its own exclusive sphere of competence and responsibilities.

The inspection procedures are differently implemented on the basis of annual and triennial planning.

For the purposes of the Decree, the “Plant Survey” (“Controllo su impianto”) has been defined as follows: “activities of assessment and verification, including those implemented through site survey, aimed at verifying the initial fulfillment and permanence of all the conditions that any plant must comply with for the sake of getting the tariffs, particularly with regard to the source used, connection to the grid, compliance and proper functioning of the components, equipment, and other infrastructure related to the way the plant actually works; the verification of the truthfulness of all the information contained in the records, documents, certificates, communications and statements provided by the owner of the plant”.

Besides, in response to the activity of people unduly declaring themselves GSE officials, GSE issued a document stating that GSE officials shall always show:

  1. a) the written statement certifying that the inspection procedure is about to be carried out in accordance with law. Such statement will include the identification data of the plant and its owner, place and time of the procedure, the identity of the people duly in charge of performing the inspections.
  2. b) plasticized identification GSE badge or letter of offer complete with their picture and personal data.

Inspections with site survey

The official beginning of the inspection procedure with site survey shall be communicated either by registered mail or by certified email, at least 7 days before the planned day of the survey.

When, basing on what the Decree states, the inspection could be implemented without any previous notice, all the necessary communications are fulfilled immediately after the plant survey either directly by GSE itself or by the officer delegated for the inspection procedure.

During the implementation of the site survey inspection procedures, the officer delegated by GSE may request to check records, documents, blueprints of the plant, records and any other information deemed useful; it may be possible that the officer makes photographic surveys, if he considers such operations strictly related to the inspection. The report, signed both by the inspector and by the owner of the plant, or by its attorney, shall be immediately forwarded to GSE; at the same time a copy is issued to the owner of the plant or to its attorney.

The inspection survey shall focus on:

  • technical characteristics of the works, equipment and devices of the plant;
  • plant configuration and electric power output procedure;
  • potential tampering of input and output power meters, as well as the calibration procedure;
  • measuring and accounting of the electric power for purposes of the tariffs.

GSE publishes on its website the list of the information and documents which shall be made always available at the site.

The inspection procedure shall end in any case within 180 days. The inspection with survey procedures is concluded by issuance of a motivated order of the inspector, which summarizes the results of all the operations implemented, the legal reasons, and any observation made by the owner.

Material breaches and related consequences

In case, as a result of the activity of inspection, GSE finds a material breach among those indicated in Annex 1to the Decree (which is not a closed, exhaustive, list), the plants which have already been granted feed-in tariffs will lose them; furthermore, in such a case GSE will also be entitled to recover the sums which have been already unduly paid to the owner.

Outside the hypotheses listed in the Annex 1 of the Decree, when GSE finds other breaches or non-compliance with law, which however the inspector considers being relevant for the exact quantification of the feed-in tariffs due, GSE will recover the sums unduly paid; at the same time then, GSE could also take the most appropriate measures, often by restating the due feed-in tariffs basing on the results of the inspection.

Please find attached for your convenience the list of material breaches under Annex 1 of the Decree.

ANNEX 1

Non exhaustive list of material breaches:

  • filing with GSE of false information, untrue or forged documents concerning the application for feed-in tariffs, or failure to file necessary documents required for verifying the eligibility for the tariffs;
  • breach of the mandatory term for the filing of the application for feed-in tariffs and, if required for eligibility for the tariffs, violation of the mandatory term for the connection to the grid;
  • failure to comply with the measures ordered by GSE after the survey inspection;
  • unavailability of the documents to be made available at the site plant, in case such violation has already been ascertained in the course of a previous inspection;
  • obstructive or negligent behavior performed by the owner of the plant toward the inspector or the grid manager, denial of admission to the plant site or denial of access to information and documents;
  • electric power meters alteration;
  • failure to communicate to GSE the variations of the configuration of the plant, aimed at benefitting from higher feed-in tariffs;
  • revamping or improving activities not compliant with the applicable regulations or with the declarations aimed at obtaining the renewable energy qualification or the feed-in tariffs;
  • null or not effective permit or license for the construction and/or operation of the plant;
  • lack of requirements for the qualification as renewable energy plant, for the eligibility for feed-in tariffs or for the obtainment of any authorizations;
  • failure to communicate to GSE the use of fossil fuel in a percentage two per cent  higher than what allowed by law;
  • use of renewable fuel not in compliance with the authorizations granted or the with documents filed for the obtainment of renewable energy qualification or feed-in tariffs;
  • failure to communicate to GSE the effective completion of the works certification within the mandatory term provided by applicable regulations, should such requirement be essential for obtaining feed-in tariffs;
  • use of tampered or stolen components.