Italy’s transmission system operator Terna has awarded 10 GWh of energy storage capacity in the first auction held under the Electricity Storage Procurement Mechanism (MSCSE) across the Central-South, South, Calabria, Sicily, and Sardinia distinct zones.

The auction results highlight significant market interest, with bids exceeding demand by more than four times and a weighted average clearing price of €12,959 (~$15,200)/MWh/year, well below the ceiling tariff of €37,000 (~$43,400)/MW/year.

The price discovered in the Central-South region was €14,566 (~$17,085)/MWh/year, South and Calabria €12,146 (~$14,247)/MWh/year, Sicily €15,846 (~$18,587)/MWh/year, and Sardinia €15,029 (~$17,628)/MWh/year.

“The auction results show strong competition and robust market interest. We are looking at an associated investment volume of around €1 billion (~$1.17 billion), which will enable greater renewable integration while further reducing reliance on thermoelectric generation and related natural gas consumption,” said Giuseppina Di Foggia, Terna’s Chief Executive Officer and General Manager.

The contracted lithium-ion battery systems from the first MSCSE auction are scheduled to enter operation in 2028.

The storage capacity procured through the mechanism will play a fundamental role in operating the electricity system over the coming years, as the share of intermittent renewable sources continues to grow. It will enable their full integration into the system while providing the ancillary services required to ensure grid security and adequacy.

Since 2023, 17 GW of new renewable capacity has been commissioned in the country.

In July, Italy’s Ministry of Environment and Energy Security announced it received nearly 1,500 expressions of interest (EoI) under the country’s new mechanism to support renewable energy projects utilizing energy sources such as solar and wind. Solar projects received 1,400 EoIs for a total capacity of roughly 17.6 GW. Wind power projects received 90 EoIs for a total capacity of 2.9 GW.

In April this year, Italy’s energy management agency, Gestore dei Servizi Energetici, invited bids for the second round of cumulative 1.04 GW agrivoltaic power projects. The projects are expected to generate electricity of up to 1,300 GWh per year. They can receive incentives of up to €323.41 million (~$356.07 million).