by Christos Kolokathis and Michael Hogan

In its recent draft National Energy and Climate Plan, Italy set ambitious targets for increasing the share of variable renewable energy and committed to closing all coal plants by 2025. These developments, coupled with concerns about the economic viability of power plants and the ability to “keep the lights on,” resulted in the government introducing a capacity market.

This Paper offer a review of the resource adequacy outlook for Italy and the design of the capacity market, and map out a pathway for achieving a reliable, cost‑efficient and decarbonised Italian power system.