Italy’s first auction for grid-scale storage projects has awarded a massive 10 GWh of capacity, a landmark moment for the nation’s energy transition. Terna, Italy’s grid operator, announced the results of the inaugural MACSE (Multi-Annual Capacity Security) auction on October 31, 2024, confirming that planned installations will be concentrated in the country’s southern regions. The auction significantly exceeded its initial 8 GWh capacity target, with successful bidders securing 15-year contracts. This development complements other national green initiatives, such as when Italy Advances Renewables Auction, Allocates 322 MW of Solar, pushing the country further towards its renewable energy goals.
The auction, which took place in September, was open to battery systems with durations of 2, 4, 6, and 8 hours. Terna had initially set a target of 8,000 MWh but increased it to 10,000 MWh due to the high number of competitive bids received. The winning projects consist of 1,700 MW of battery systems, which will be located in the regions of Calabria, Campania, Puglia, and Sicily. These regions, particularly Sicily, are becoming hubs for energy innovation; this auction builds on the momentum of projects like the Sungrow Sicily battery project: Stunning 220 MWh… – PVknowhow.com deal and other efforts showing how Sicily solar energy storage: Unique 2024 Project Advances.
Italy battery storage auction Winners
While a full list of winners has not been disclosed by Terna, several major players have been confirmed. The winning companies include Enel X Energy Storage, a subsidiary of Enel X Italia, which secured a substantial 1,000 MW of capacity. Axpo Italia and Axpo Italia Energy Solutions collectively won 400 MW, while Sorgenia, a subsidiary of F2i Sgr, was awarded 300 MW.
Italian companies Renantis, Energy Intelligence, and Altea Green Power also participated in the auction. In a sign of the market’s overall health, Altea Green Power has since reaffirmed that its long-term growth plans remain unaffected by the auction results, indicating a strong and committed developer landscape in Italy.
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Bidding Process and Market Impact of the Italy battery storage auction
The MACSE auction introduced a new scheme for the Italian market, offering long-term 15-year capacity contracts through a competitive bidding process. Participants submitted bids that included a capacity fee and a premium, which was capped at โฌ70 per MWh. The auction operated on a pay-as-bid format, with the premium being the only variable.
The response was overwhelming. Terna received 50 bids from 24 companies, totaling 26,400 MWh of capacityโmore than triple the initial 8,000 MWh target. Of the bids submitted, 23 were for 2-hour duration, 18 for 4-hour, eight for 6-hour, and one for 8-hour capacity. The intense competition resulted in what industry leaders have called “exceptionally competitive prices,” which are expected to influence the broader market by making private power purchase agreements (PPAs) and tolling agreements more attractive.
Capacity and Premium Details from the Italy battery storage auction
The awarded capacity includes 4,400 MWh of 2-hour duration, 4,800 MWh of 4-hour duration, and 800 MWh of 6-hour duration. No capacity was awarded for 8-hour duration systems.
The average premium for the winning bids was โฌ33.944 per MWh, with a tight spread between the highest (โฌ43.99 per MWh) and the lowest (โฌ23.99 per MWh). This premium is paid in addition to the clearing price of the capacity market. The successful auction marks a significant step forward in Italy’s transition to renewable energy, joining other forward-thinking policies like the Italy agrivoltaics tender: 323 Million Euros for …. The awarded projects will be crucial for stabilizing the grid and facilitating the integration of more solar and wind power.
Future Grid Stability from Italy battery storage auction
The awarded storage projects will provide essential grid services, such as frequency regulation, voltage support, and energy shifting. These services are crucial for balancing the grid and ensuring a stable electricity supply as the share of intermittent renewable energy sources increases. The success of this auction is also a clear sign of the maturation of the lithium-ion Battery Energy Storage System (BESS) industry, driven by fierce competition and the bankability of the MACSE program.
These storage systems will address the intermittency of renewables by storing excess energy generated during periods of high production and releasing it during periods of high demand. To put this 10 GWh award in perspective, some major global players have connected around 4 GWh of battery energy storage projects worldwide, highlighting the sheer scale of Italy’s ambition. This will reduce the need for fossil fuel-based power generation, further contributing to Italy’s decarbonization goals and playing a vital role in achieving the country’s climate targets.
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