* Looking to buy projects from struggling developers -exec
* Wants refunding mechanism for lost production from grid
* Solar plant build to stop if no visibility on incentives
By Stephen Jewkes
MILAN, Oct 6 (Reuters) - Edison, Italy's second biggest utility, hopes to take advantage of the economic crisis to boost its renewable energy pipeline by buying up projects from struggling developers, a top executive said.
Edison, which currently builds its own greenfield plants, funds renewable activity from its balance sheet. In its last business plan it earmarked around 1 billion euros ($1.47 billion) for renewable expenditure to 2015, though a new plan is due by the end of 2009.
"In the wake of the crisis, many developers are coming to us and we are looking carefully to see if their projects can be added to our pipeline," Edison's head of renewable energy, Nicola De Sanctis, told Reuters in an interview.
The group, whose main renewable business is wind energy, expects wind capacity of about 440-450 megawatts (MW) by end-2011 from 350 MW at the end of 2009, with a current greenfield pipeline of about 700 MW.
"The green certificates we generate from wind help us with our core gas-fired generating activity and we expect that to cover the group's overall GC (green certificate) shortfall," De Sanctis said.
In Italy, renewable power generators are eligible for green certificates. Fossil fuel power plants can meet renewable quota obligations by buying GCs on the market.
Edison, which has completed its build-out of gas-fired generation plants, sees renewable energy as a perfect fit for its fuel mix.
"Aside from the returns guaranteed by incentives, it gives us a degree of independence from gas prices as well as exposure to the regulated market," De Sanctis said.
The group is also able to leverage its extensive power plant presence in Italy to navigate a way through the complex process for granting permits for renewable projects.
SOLAR CONCERNS
Edison's solar business is smaller than wind with just 3.3 MW of installed capacity. But the company aims to grow this part of the business organically and through acquisitions.
"We have a pipeline of 50 MW, but for the time being we'll only close those projects that will be in operation by end-2010," De Sanctis said. Italy's generous solar incentives scheme is due for review next year.
"These are the last few months for investments in large solar plants after which the market will stop unless we're given greater visibility on the new incentive scheme," he said.
Under Italian rules, energy generated from renewable projects is given priority access into the national grid. But because of grid constraints, not all plant capacity can be used as more and more renewable operators come on line.
"We urgently need to upgrade the grid infrastructure to cope and we also need a mechanism to allow renewable producers like ourselves to be refunded for lost generation," he said.
($1=.6790 Euro)
(Editing by John Stonestreet)