New Mafia controversy undermines Italian wind

In the last month, wind has occupied an important role in Italian politics. And not in a good way.

Armando Siri, member of political party Northern League and undersecretary for transport, was put under investigation last month by the Direzione Investigativa Antimafia - Italy’s police dedicated to fight mafia - for allegedly accepting a €30,000 bribe from wind consultant Paolo Arata. The alleged bribe was to promote amendments to the national economic and financial plan that would ease the permitting process for wind projects.

You could say that this is – bribe aside! – a noble intention. Permitting is one of the major hurdle for wind developers across Europe: Germany and France, for example.‍

Mafia connections‍

The problem here is that Arata is a business partner of Vito Nicastri, an entrepreneur who has links with the Sicilian Mafia. A few years ago, Nicastri was named “the king of wind energy” by anti-Mafia investigators as he was one of the first businessmen in Italy to recognise how profitable the wind industry could be.

Nicastri, who is now in jail, used to lead over 43 companies involved in building wind farms across Italy, and Sicily in particular, that were used by Mafia organisations for money laundering. We wrote about Mafia in the wind sector in Sicily in 2017.

Siri and Arata have denied any wrongdoing, and the amendments proposed by Siri haven’t being approved, but this still isn’t good for the image of the sector in Italy.

The most surprising bit is that Italy’s leading parties have been arguing for weeks to decide if Siri should leave the government. Finally, Italian Prime Minister Giuseppe Conte sacked Siri this month, despite fierce resistance from Northern League leader and Deputy Prime Minister Matteo Salvini. Siri and Arata have been advising Salvini on energy policies, and he had argued that Siri should remain in government until proven guilty in court.

This is the same government that pledged last year to source 90% of the country’s energy needs with wind and solar power by 2030, and 100% by 2050. In 2017, renewables supplied 18.3% of Italian energy needs.

Now, it isn’t clear how the government plans to attract the necessary investment to reach that target in the next ten years. Many investors won’t feel confident to invest in a nation where members of the central government could be working with the Mafia.

Investor confidence

The Italian renewables and energy efficiency association Coordinamento Free published a paper in November, which showed that Italy could install 17GW of wind capacity by 2030, up from 9.9GW at the end of 2018. The country certainly has the resources to make that happen, and the interest of utilities, developers and investors is there too. ERG, Falck Renewables and E.On are examples of companies that have been active in the Italian wind market over the past year.

However – and I may be stating the obvious here – corruption is seriously damaging to the future development of the wind market in Italy.

Generous subsidies have attracted Mafia organisations to the Italian wind sector since the ‘90s, and in particular in the south of the country. If the government isn’t serious about fighting this plague, renewable energy can never thrive. Scandals like this damage investors’ confidence and also the image of wind companies in Italy.

This isn’t simply damaging to Italy. With a crisis in wind installations in Germany – Europe’s leading market – Italy could take advantage of the situation and re-build confidence in its wind sector to attract investments. This is what the governments in Spain and France are trying to do, but Italy’s leaders don’t seem to get that.

And here’s the thing: renewable energy targets mean nothing, if central governments aren’t able to provide a safe and secure environment for investors.