Agrivoltaic: Managing the use of the land and balancing the energy transition with local and small-scale farms’ production

INTRODUCTION
The development of renewable energy sources (RES) is a priority for the European Union. At the same time, given the principle of subsidiarity, EU Member States are free to decide how they support RES, so long as they comply with the rules of the EU energy market (Banja, Jégard, Monforti-Ferrario, Dal-lemand, Motola and Sikkema, 2017). Given Italy’s potential of RES, the energy sector has a fundamental role to play in the growth of a sustainable economy of the country (Ministero dello Sviluppo Eco-nomico, 2013).

Renewable generation almost doubled in the last decade in Italy, covering the 37% of the national generation in 2016. Hydro generation still plays the main role, but other RES showed a great increase, especially regarding photovoltaic (PV) plants. In 2008 PV generation was about 0,3% of total renewable generation in Italy and in 2016 this share became 20,5% (Giannì, 2017). The increase of RES share up to 48%-50% in electricity sector consumptions and PV capacity is expected almost to triple by 2030. However, the EU’s main task to mitigate climate change include also the necessity to preserve natural resources and maintain a certain standard of food production quality. This paper investigates the role of the national public administration – already characterized by slowness and by lack of uniformity – in balancing the use of the land between agriculture and ground-mounted PV plants. This land competition between the food production demand and energy production demand is also increasing due to limited land resources. Much of this demand can be matched with aggressive building-integrated PV and rooftop PV, but as large surface areas are needed because of the relatively diffuse nature of solar energy, these coupled land challenges can be ameliorated using the concept of agrivoltaic (Pearce, 2016). Co-developing the same area of land for both solar PV power as well as for conventional agriculture will increase the productivity of PV plants without damaging the soil used. The paper analyses a case decided by the TAR if Sardinia of a small-scale farm, which aimed to obtain funding by the Public administration in order to buy a 20Kwp PV system. According to the TAR, the PA failed to verify the PV system potential and to recognize that the PV energy production was proportionate with the farm’s self-consumption. This case underlines indeed the difficulty for the PA to apply the principle of proportionality regarding the energy produced and consumed.

1. THE BOUND BETWEEN A COMMON RENEWABLE ELECTRICITY MARKET AND CLIMATE CHALLENGES IN THE EUROPEAN UNION

The traditional EU’s role in establishing an internal European market has been combined with its new role in protecting the environment. Increasing evidence of climate change and growing dependence on energy has underlined the European Union’s (EU) determination to become a low-energy economy and that the energy consumed is secure, safe, competitive, locally produced and sustainable. In addition to ensuring that the EU energy market functions efficiently, the energy policy promotes the interconnection of energy networks and energy efficiency. It deals with energy sources ranging from fossil fuels, through nuclear power, to renewables. Stable and predictable regulatory frameworks are crucial for facilitating cost-effective renewables deployment.

Already in 1995, “On an energy policy for the EU” stated that “market integration is the central, determining factor in the Community’s energy policy” and that “certain forms of energy like renewables may need to be supported initially through specific programs or subsidies in order for them to find a place in the market” (European Commission, 1995).

Thus, variable technologies (wind and solar photovoltaic) have become central to the transformation of the EU’s power system, in particular regarding the field of the electricity sector. In fact, in the global scenario, multiple scholars have talked about “electrification” of demand, as electricity will cover 21% of final energy consumption by 2030 and the growth of RES-E will translate into higher investments in flexible electricity infrastructure to guarantee quality, adequacy, and security of power systems (Ministero dello Sviluppo Economico, 2017).

Regarding the need for the transition towards renewable resources, the EU’s original Renewable energy DIRECTIVE (2009/28/EC) sets a binding target of 20% final energy consumption from renewable sources by 2020. To achieve this, EU countries have committed to reaching their own national renewables targets for 2020 ranging from 10% in Malta to 49% in Sweden. In 2016, renewables accounted for 17 % of gross final energy consumption in the EU, with the heating/cooling sector accounting for 8.6 %, electricity for 7 %, and transport for 1.4 %. In December 2018, the new revised Renewables energy directive (2018/2001) entered into force – establishing a new binding renewable energy target for the EU for 2030 of at least 32%, with a clause for a possible upwards revision by 2023. Besides, the EU has set itself a long-term goal of reducing greenhouse gas emissions by 80-95%, when compared to 1990 levels, by 2050. The Energy Roadmap 2050 explores the transition of the energy system in ways that would be compatible with this greenhouse gas reductions target while also increasing competitiveness, employment and security of supply (European Commission, 2012). In the case of Italy, the importance of the energy transition is linked also to the gap between Italian electricity prices and average EU ones was equal to roughly € 35/MWh in 2015 for an average household, and to about 25% on average for companies (Ministero dello Sviluppo Economico e Ministero dell’Ambiente e della Tutela del Territorio e del Mare, 2017). The RES deployment in Italy can decrease not only emissions, but also energy dependence and, in the future, the gap between Italian electricity prices and European average ones.

1.1 The importance of implementing EU’s targets by the national administration

Despite the improvements over the years of the administrative procedures for removing regulatory and non-regulatory barriers when promoting renewable energy, a bulk of EU countries, including the case of Italy, lack the implementation of online applications and shortening the times regarding the connections requests. The cost of renewable energy is not determined solely by wind, solar, biomass or water resources; project costs are also driven by administrative and capital costs. Complicated authorization procedures, the lack of one-stop-shops (one single agency for all authorization, certification, and licensing procedures), the registration procedures, and planning processes may take months or years and increase project risk. The Renewable Energy DIRECTIVE 2009/28/EC provides that “the Member States shall ensure that the procedures for authorization, certification and licensing procedures for renewables are necessary and proportionate; promote coordination between different administrative levels and agencies and set concrete time limits for decisions” (Official Journal of the European Union, 2009). Thus, administrative procedures shall be streamlined at the adequate administrative levels and administrative requirements shall be objective, transparent, and proportionate. The renewable energy progress report (2013) revealed that administrative procedures are often subject to local and regional decisions and are not always national in their scope. The concreteness and completeness of measures taken for administrative simplification are very low in all Member State reports: the number of required permits and the number of authorities involved in procedures often are not mentioned (Commission Staff Working Document, 2013). The Green Paper “Towards a secure, sustainable, and competitive European energy network” provides that planning and administrative authorization procedures are a common source of delays to energy projects (European Commission, 2008).

With a well-functioning administrative body, efficiency in the energy market and adaptation to climate challenges are more likely to be achieved through the widespread implementation of renewable resources’ smart grids and infrastructure in all European Countries.
Italy has already achieved its renewable energy sources targets by 2020, with a penetration of 17.5% in total energy consumption in 2015 vs. a 17% target to be reached by 2020 (DLA Paper, 2018). However, the energy transition is just at the beginning of its process, and a lot still needs to be done.

In order to achieve long-term targets set out by the European Union, the national’s administration of each country needs to ensure an efficient implementation of renewable energies.

In Italy, some of the priorities of action of the Ministry of Economic Development includes: to align electricity prices and costs to European standards; to ensure Italy’s full integration with the European market; and to maintain and develop a free market fully integrated with energy produced from renewable sources, gradually removing all distortions and absorbing current surplus production capacity. The National Energy Strategy has been approved with an Inter-ministerial Decree dated 10 November 2017 and it lays down the targets to be achieved by 2030, in accordance with the long-term scenario drawn up in the EU Energy Roadmap 2050: It provides, inter alia, for a reduction of emissions by at least 80% from their 1990 levels and growth of world energy consumptions by +18% by the year 2030. However, the achievement of Italian’s energy transition is most of the time linked with each regional administrative reality, lacking uniformity and certainty. These barriers can limit Italian’s territorial potential for many of the renewable resources’ energy production potential.

2. THE ADVANTAGES OF PHOTOVOLTAIC SYSTEMS FOR ENERGY PRODUCTION AT THE NATIONAL LEVEL

2.1 Advantages and current limits of PV

One of the most efficient and effective renewable resources is photovoltaic. Not only it has a lower environmental impact if compared with other renewable resources (as wind power), but it can also be installed for many activities and purposes (residential, commercial, industrial, and utilities). Electricity produced by solar cells is clean and silent. Because they do not use fuel other than sunshine, PV systems do not release any harmful air or water pollution into the environment, deplete natural resources, or endanger animal or human health (Mundus Energy Group Ltd, 2019).

PV systems are quiet and visually unobtrusive and especially small-scale solar plants can take advantage of unused space on rooftops of existing buildings, as in the case for private consumers. They can be constructed to any size based on energy requirements and homeowners can add modules every few years as their energy usage and financial resources grow. Besides, solar energy is a locally available renewable resource. It does not need to be imported from other regions of the country or across the world. This reduces environmental impacts associated with transportation and also reduces our dependence on imported oil; And, unlike fuels that are mined and harvested, when we use solar energy to produce the electricity we do not deplete or alter the resource. Europe is not the obvious candidate to be the world leader in solar PV electricity generation, but yet the EU as a whole produced more electricity from solar power than anywhere else at 94,570 MW in 2015. Italy, given its optimal geographical position, is one of the countries among the EU Member States with more solar PV potential. However, solar energy is somewhat more expensive to produce than conventional sources of energy due in part to the cost of manufacturing PV devices and in part to the conversion efficiencies of the equipment. But, as the conversion efficiencies continue to increase and the manufacturing costs continue to come down, PV will become increasingly cost-competitive with conventional fuels. Besides, even if solar power is a variable energy source, with energy production dependent on the sun, the introduction of new technologies as batteries working as energy storage, will increase the capacity of solar panels. Furthermore, given the fact the initial investment for its production is decreasing, PV represents the most efficient energy source of the electric market in our territory (Petalo, 2019).

However, Germany, even though is not in the best geographical location, with 39,700 MW is listed as 2nd in world capacity, thanks to very generous solar subsidies (British Business Energy, 2016). In Italy, the main types of barriers are related to the planning time frame, coordination between different authorities, times needed to obtain authorizations, costs for obtaining permission. In particular, for industrial ground-mounted systems, the authorization processes are characterized by even more restrictions, requiring longer procedural steps than in the case for residential or commercial systems. At the same time, large surface areas are needed because of the relatively diffuse nature of solar energy.

2.2 Administrative Barriers for the authorization of industrial ground-mounted systems in Italy

Even though solutions have been undertaken to technological and economic disadvantages, other barriers that the public administration has to face still remain unresolved. The barriers for the implementation of ground-mounted PV systems include not only the production’s high costs but also the environmental costs – including the trade-off of the use of the land between agriculture and production of solar power – and the slowness of the administration during the authorization process.

In Italy, the energy generated by photovoltaic plants connected to the grid benefits from public subsidies under the Feed-in scheme is named “Conto Energia”, which ended in 2013 (Beccaro, 2016). The support scheme for the photovoltaic sector was ruled from 2005 to 2012 by the FIT systems issued by five Ministerial Decrees (“MD”) that applied to plants with a minimum capacity of 1 kWp. They entered into operation within specific deadlines and grants the achievement of public subsidies, whose values depend on the specific FIT system, the date on which each plant entered into operation, the capacity and type of plant, and the electricity produced. The tariff is granted over a period of 20 years, starting from the commissioning date. For plants commissioned by 31 December 2012, the scheme (called the feed-in premium) provides for a tariff in relation to the electricity produced.

As of 2013, the tariff has been made up of both the incentives and the value of electricity PV plants have not been longer allowed to achieve public subsidies, having the contingent cost established by the Italian Government for public subsidies been reached (equal to 6,7 Euro billion). As a consequence, photovoltaic plants that currently benefit from public subsidies are those already built and in operation, which were admitted to the various Feed-in schemes, in accordance with the rules established by the relevant ministerial decrees. Today, the authorization process for the installation of an industrial PV system is characterized by the following steps, whose barriers may limit the PV deployment (PV-Financing EU, 2019):

1. First of all, due to possible environmental restrictions, land-use classification is extremely important for site selection.
2. The procedure to obtain authorization to build, connect, and operate a PV system, starts with the submission of the authorization request to the competent Administration. However, local Administrations and Authorities are not uniformly trained/informed or even actively involved in the PV legal-administrative procedures. This causes a non-uniform response at the regional/local level in terms of swiftness and efficiency of the administrative steps for the authorization process.
3. The single authorization’s time-limit for the conclusion of the procedure is 90 days. However, the procedures, timelines, and time delays can vary according to the territorial offices concerned.
4. Systems of more than 1 MWp must undergo an Environmental Impact Assessment (EIA) beef the authorization procedure. The results of the EIA and of the Environmental Impact Evaluation (if necessary) are received by the Services Conference. The works of the Services Conference are suspended until the environmental procedures are finalized. Even if necessary, this is another variable that can push towards further slowness and lack of uniformity of procedures and requirements.
As a consequence, In Italy, around 80% of all PV systems installed in 2017 were residential, while half of the total capacity was related to industrial applications, with several plants with a capacity between 200 kWp and 1 MWp (International Energy Agency, 2018).

2.2.1 The principle of proportionality: Managing the use of the land
Another problem that the public officer has to face during the process of authorization of an industrial PV plant, is the balance between the food-energy conflict.

The interests of usage of the territory for the production of electric energy through PV ground-mounted systems need to be proportionate to the interests to the public interest, not only for the environment and to the cultural heritage of the latter but also for the promotion and development of the agriculture. These two interests are in fact very often in conflict, and each official of the public administration has to ensure that the principle of proportionality is respected. Thus, when making decisions, the officer shall adopt measures ensuring that they are proportionate to the aim pursued and respecting the fair balance between the interests of private persons and the general public interest. Besides, the principle of proportionality needs an adequate cost-benefit analysis (e.g. considering rightly materials expenses), especially when administration adapts measures limiting individual rights.

In other words, the public administration, in the authorization process for the implementation of PV large systems, has to take into account:

1. The principle of effectiveness: ensuring that all the measures necessary to guarantee that the Directive 2009/28/EC is applied. In order to meet global energy demands with clean renewable energy such as with solar photovoltaic (PV) systems, large surface areas are needed because of the relatively diffuse nature of solar energy. Much of this demand can be matched with aggressive building-integrated PV and rooftop PV, but the remainder can be met with a land-based PV farm.

2. The precautionary principle: the public officer has to analyze case by case any appropriate measure as a precaution for possible damage to the soil. That the damage of the soil caused by large scale grounded PV systems may lead to a loss for agricultural outcomes. This may have a negative effect on the environment and on the overall food production (public interest) and on the economic private interests of the farms’ employers. As a matter of fact, the risk assessment of a PV installation requires to be entrusted by scientific experts.

The problem is that food production demand and energy demand are both growing and vie for limited land resources. This land competition is exacerbated by the increasing population. More often, provisional measures are undertaken in order to protect the environment and they justify the adoption of restrictive measures, if provided they are non-discriminatory, objective, and proportionate.

Furthermore, in Italy, the new incentives for the PV systems with electric power higher than 20 kWp created by the “Decreto Ministeriale FER 2018 – 2019”, do not include cases in which grounded large-scale systems should be situated in agricultural soil (Petalo, 2019). These coupled land challenges can be ameliorated using the concept of agrivoltaic or co-developing the same area of land for both solar PV power as well as for conventional agriculture (Pearce, 2016).

Incorporating elevated solar installation technologies above existing agricultural production land would allow for the continuation of agricultural activities on parcels of land, generate additional income streams, and provide a renewable source of electricity for the electricity grid or their facility (Macknick, Beatty and Hill, 2013).