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When oil royalties finance sustainable energy: Inspiration from Covenant municipalities in Italy
In the Basilicata Region, policies support the transfer of oil royalties from companies operating in the region towards sustainable energy initiatives foreseen in the action plans of Covenant signatory municipalities. This region of Italty is home the Agri Valley, the largest oilfield in continental Europe. Extraction of the crude oil present in this area covers about 6% of the national energy demand and represents 80% of the domestic production.

All the municipalities benefitting from the royalties are thus enticed to use these revenues mainly for the production of energy from renewable sources and energy efficiency measures, as identified in their Sustainable Energy Action Plans. This provides an outstanding example of how revenues derived from fossil fuels can be reinvested in non-fossil sources, constituting a sort of revolving fund for environmental compensation !

To date, 15 SEAPs drafted with the support of the Basilicata Energy Company have been approved by the European Commission Joint Research Centre and 18 are under evaluation.

Below are examples of typical SEAP measures, undertaken by the Basilicata Energy Company, that are to be financed through this scheme :

  • A 992.25 kWp ground mounted photovoltaic installation and a 16.20 kWp photovoltaic system on the roof of public buildings, both in the Municipality of Tito ;
  • 710,64 kWp photovoltaic canopies to cover the public parking of the San Carlo Hospital in the Municipality of Potenza ;
  • A 9,18 kWp photovoltaic system on the roof of a school building in the Municipality of Anzi In the Province of Potenza – a Covenant of Mayors Coordinator - the Municipality of Calvello is already well ahead in the implementation of such SEAP measures. Among other things, the municipality uses the oil royalties to provide financial contributions to citizens for the installation of energy-saving boilers and small photovoltaic systems.

More information about this scheme can be found on the following website :

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  The sole responsibility for the content of this newsletter lies with the Covenant of Mayors Office. It does not necessary reflect the opinion of the European Union. The European Commission is not responsible for any use that may be made of the information contained therein. The Covenant of Mayors was set up with financial support of the European Commission and consists of five associations of European local authorities: Energy Cities, Climate Alliance, Eurocities, CEMR, Fedarene, and ICLEI Europe.

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