Italy: BESS Secures Nearly 600MW in 2027 Capacity Market
BESS technology has emerged as a significant winner in Italy’s recent capacity market (CM) auction, which took place on February 26-27. In this auction, a total of 38,057MW of obligations was awarded to existing resources, while 594MW was allocated to new resources, in addition to 4,365MW designated for resources based outside Italy.
According to transmission system operator (TSO) Terna, approximately 95% of the newly awarded resources were classified as ‘electrochemical storage’, which primarily refers to batteries or battery energy storage systems (BESS). This translates to around 564MW of new capacity. The contracts for both new and existing resources are valued at €47,000 (approximately US$49,000) per MW per year, though foreign resources receive a different rate. The majority of this capacity is situated in the northern region of Italy, which is divided into eight electricity market and pricing regions.
This latest auction marks a significant increase in BESS capacity compared to the CM auctions for the 2025 and 2026 delivery years, which only saw 80-90MW of BESS contracts awarded each year. The CM, alongside a new energy storage-only auction scheme known as MACSE, is expected to form the foundation for grid-scale storage in Italy. Steven Coppack, director for power market services at consultancy Timera Energy, highlighted that this combination makes Italy unique in Europe. The long-term contracted revenues from both schemes present an attractive opportunity for risk-averse investors to enter the market.
MACSE, which stands for Meccanismo di Approvvigionamento di Capacità di Stoccaggio Elettrico (Electricity Storage Capacity Procurement Mechanism), was initially scheduled to launch its first auctions in the first half of 2025, but this has now been postponed to the latter half of the year. In the past year or two, numerous developers and operators have been preparing their projects for construction, although actual ground-breaking is expected only after the full rules and criteria for MACSE are finalized later this year.
Recently, agritech company N2OFF acquired two projects under development, each with a capacity of 98MW/392MWh, from developer Solterra. Currently, utility Enel is the only entity actively constructing a substantial BESS portfolio in Italy. In 2023, Enel began developing 1.6GW of projects, primarily in Sardinia, following significant capacity market wins in 2022. According to Aurora Energy Research’s European Battery Markets Attractiveness Report, Italy ranks as the most attractive energy storage market in Europe.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/italys-capacity-market-auction-awards-nearly-600mw-to-battery-energy-storage-systems-for-2027/
