Italian grid operator Terna held the first tender of the Macse mechanism on 30 September and awarded 10GWh of battery energy storage (Bess) capacity to the islands and the south of the country, covering all the required demand. Interest in the auction was high, with bids exceeding demand fourfold.
"Italy's first Macse auction has set a shock benchmark for storage economics in Europe," country manager at clean energy supplier Jinko Power Technology, Felice Lucia, told Argus.
The winning Bess projects will receive an average annual premium of nearly €13,000/MWh/yr in exchange for providing that capacity on the dispatching services, about 65pc below the €37,000/MWh annual cap originally announced.
Most analysts had forecast €21,000–25,000/MWh/yr, but the low clearing premium was a "structural break", according to Lucia.
He attributed such a low result to global cost curves, saying that winners did not bid on today's Bess European costs, but on 2026–27 trajectories shaped by Asia, considering the timing of connection for the projects will be 2028. And for most winners, Macse is not about quick high returns but about securing a long-term floor to de-risk projects while building scale, according to Lucia.
"Macse is more than an Italian milestone — it is Europe's 'solar moment' for storage," he added. "Like solar photovoltaic [PV] a decade ago, ultra-low bids are forcing a reshaping of the value chain. Only integrated operators can deliver at these levels — others will need to consolidate or pivot."
Italian utility Enel was awarded over half of the capacity, with the biggest Bess project located in the south of the mainland with a capacity of 3.6GWh.
Filippo Fontana — a spokesperson for the Italian PV Alliance — said it is necessary to introduce mechanisms that guarantee a more balanced distribution among operators in upcoming tenders. "Tools such as a maximum cap per operator — already tested in the fast reserve — could prove useful," he said.
Still, the first Macse auction is to be considered a "success" because of how much interest it attracted, Optimize Energy country manager Pablo Lopez de Rego Lage told Argus.
Although nearly 30GWh of Bess projects did not win the auction, Italy offers many alternatives, such as capacity market auctions, tolling-type contracts, or co-location with renewable energy plants, according to Lopez de Rego Lage.
The merchant option is particularly attractive at the moment, Inxieme country manager Gabriele Franze said.
Making a comparison with a potential market sale, Franze said, "Assuming an average of 1.2 cycles per day, the value of €12,959/MWh would imply the ability to capture a market spread of €29.60/MWh. Current spreads are significantly higher, averaging around €80/MWh, and are expected to remain at these levels at least in the medium term."
He also added that Bess projects going merchant have no obligation to return 80pc of revenues from ancillary services to Terna and that they have no time constraints.
"I don't believe that, moving forward, Macse will be strictly necessary to continue the development of Bess," Franze said. "Their merchant profitability will make the business sustainable even without public subsidies."
Italy's total installed storage capacity — including Bess and pumped-storage hydro — reached 70.29GWh in August, up by 102.83MWh from July and 6.16GWh higher than a year earlier. Most Bess projects are in the north zone, for a total of 5.7GWh.
