When the auction is too popular: How Italy's FER CfDs are reshaping the PPA market

Heavy oversubscription in Italy’s FER-X and late FER-1 auctions has begun to reshape the power market around state-backed Contracts for Difference (CfDs), putting pressure on corporate PPAs. While the current pipeline remains relatively balanced, that equilibrium may not hold. A European Parliament study suggests the long-term trajectory is far more skewed, with CfDs projected to expand at roughly three times the pace of PPAs, raising questions about whether private long-term contracting can remain viable alongside subsidies.