MACSE tender opens BESS opportunities and challenges
Italy awarded 15-year fixed-tariff tolling contracts to 15 standalone battery energy storage systems totalling 10GWh in its first MACSE tender on October 1.
The systems have durations ranging between four and eight hours and are due to start operations by 2028.
The tender was four times oversubscribed and the weighted-average allocation price came in at €12,959/MWh/year, marking a nearly 65% discount on the official strike price of €37,000/MWh/year.
Prior to bidding, several sponsors had said they expected prices to get down to €25,000/MWh/year and BloombergNEF had projected that "bids could fall as much as 43% below the auction ceiling", meaning €21,000/MWh/year.
Among the main developers bidding in the MACSE auction were Enel, Aquila, GreenGo, Recurrent Energy, Bluefield, Neoen, Sphera Energy, Energy Total Capital, Whysol, Axpo and Aura Power.
Enel Green Power was the biggest winner with 817.4MW/5.2GWh across five BESS systems in the Calabria south and centre-south regions. The projects include a 574.3MW/3.6GWh BESS, a 37.5MW/255MWh BESS and 70.8MW/447MWh BESS in the Calabria south cluster alongside a 44.8MW/298MWh BESS and a 90MW/595MWh BESS in the centre-south area.
Eni Plenitude scored a 34MW/205MWh BESS in Sardinia and a 42MW/250MWh BESS in Sicily.
The battery energy storage development joint venture of Singapore-based BW ESS and Milan-based ACL Energy was awarded three projects totalling 320MW/2.1GWh in the south and Calabria region, including a 219.6MW/1.4GWh BESS, a 95.5MW/706MWh BESS and a 4.8MW/32MWh BESS.
Vinci-backed NatPower was awarded the 35.4MW/250MWh Scara BESS in Sicily.
Paris-based ZE Energy was awarded a 98.5MW/832MWh BESS in the Marche region.
KKR-backed Greenvolt was awarded a 70.8MW/499MWh BESS in the south and Calabria region.
Italian renewables developer Whysol, partially backed by Credit Agricole, has been awarded the 37MW/275MWh Bisaccia BESS in Avellino, Campania and the 39.6MW/295MWh Selargius BESS in Sardinia.
On September 10, the energy ministry published the minimum and maximum quotas per geographic area. Individual regions in the south had caps of up to 7GWh of the 10GWh available while the north of Italy was excluded altogether.
Sardinia and Sicily both scored their minimum required contingents of 500MWh each at weighted averages of €15,846/MWh/year in Sicily and €15,029/MWh/year in Sardinia.
Calabria and the south filled their total available contingent of 7GWh with an average price of €12,146/MWh/year.
The central-south region scored 2GWh new BESS against a 3GWh bidding ceiling at €14,566/MWh/year weighted average.
"We are looking at an associated investment volume of around €1bn, which will enable greater renewable integration while further reducing reliance on thermoelectric generation and related natural gas consumption,” said Giuseppina Di Foggia, Terna chief executive and general manager.
“Upcoming auctions will follow the evolution of renewable generation and grid development. Since 2023, 17GW of new renewable capacity has already been commissioned," she said.
Low prices reflect "fierce competition and the dominance of low-cost supply chains", said Jinko Power's Italy manager Felice Lucia. "This mirrors what we saw in Abu Dhabi’s solar auctions – once bids went ultra-low, only the most integrated supply chains could survive".
"At €12,000–€15,000/MWh/year, a four-hour system earns approximately €50,000–€60,000/MW/year gross. In other words: to compete at these levels, batteries must reach €60–€80/kWh installed by 2026–2027," he said.
Italia Solare's storage and hydrogen group coordinator Mauro Moroni praised the tender results overall but added that "low prices are not enough [as] we need a market that favours a variety of players, including small and medium-sized operators, not just large ones".
He said that "area or operator limits can be a useful tool if well calibrated" and that more revenue strategies are needed in the BESS space as "MACSE is a cornerstone but cannot be the only solution – capacity markets, tolling, PPAs and merchant [deals] must become part of the toolbox to ensure a rich and resilient ecosystem."
