Italy: BESS Secures Nearly 600MW in 2027 Capacity Market
BESS technology has emerged as the dominant force in the recent capacity market auction held in Italy, securing a significant portion of new resource contracts for delivery in 2027. The auction, conducted on February 26-27, awarded a total of 38,057MW of obligations to existing resources, while 594MW was allocated to new resources. Additionally, 4,365MW was designated for resources located outside Italy.
According to the transmission system operator (TSO) Terna, approximately 95% of the new resources were classified as ‘electrochemical storage’, which primarily refers to batteries or battery energy storage systems (BESS). This translates to around 564MW of capacity. The contract value stands at €47,000 (equivalent to US$49,000) per MW per year for both new and existing resources, although foreign resources receive a different pricing structure. The majority of this capacity is concentrated in the northern region of Italy, which is divided into eight electricity market regions.
The recent auction marks a notable increase in BESS capacity compared to the previous capacity market auctions for the years 2025 and 2026, where only 80-90MW of BESS contracts were awarded each year. The capacity market (CM) and a new energy storage-only auction scheme called MACSE are expected to form the foundation of the business case for grid-scale storage in Italy. Steven Coppack, director for power market services at consultancy Timera Energy, highlighted how this makes Italy unique within Europe. The long-term contracted revenue from both schemes is designed to attract risk-averse investors into the market.
MACSE, which stands for Meccanismo di Approvvigionamento di Capacità di Stoccaggio Elettrico (Electricity Storage Capacity Procurement Mechanism), was anticipated to hold its first auctions in the first half of 2025. However, this timeline has now been pushed back to the latter half of the year. In the past year, numerous developers and operators have been preparing their projects for construction following the confirmation of the MACSE scheme, but actual construction is expected to commence only after the full rules and criteria are finalized later this year.
Recently, on February 24, agritech firm N2OFF acquired two projects under development, each with a capacity of 98MW/392MWh, from developer Solterra. Currently, utility Enel is the only company actively constructing a significant BESS portfolio in Italy. In 2023, Enel began building 1.6GW of projects, primarily in Sardinia, following substantial capacity market wins in 2022.
Italy has also been recognized as the leading market for energy storage in Europe, according to Aurora Energy Research’s European Battery Markets Attractiveness Report released on March 3.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/italy-secures-nearly-600mw-of-battery-energy-storage-contracts-in-2027-capacity-market-auction/
