Terna allocates 43 GW in Italian capacity market auction for 2027

Italy’s transmission system operator (TSO) Terna has announced the results of its capacity market auction for the delivery year 2027. It has allocated 38.04 GW of existing capacity, 0.59 GW of new capacity and 4.36 GW of capacity from abroad. The auction was held on Feb. 26.

For each Italian region, Terna announced the total amounts accepted and the related enhancement prizes. Altogether, the total capacity awarded is 43 GW, for more than €1.847 billion.

The total nationwide capacity allocated amounted to 38,047 MW across eight different regions. In each area the enhancement premium is €47,000 per MW per year and the North area got the most substantial allocation share, with 22,063 MW of capacity allocated.

New capacity awarded amounted to 594 MW. The North received the lion’s share of new capacity of 458 MW; Sicily was allocated 13 MW; the South 7 MW; the Central North 35 MW; and the Central South 81 MW. The enhancement prize is €47,000 per MW per year. In the previous auction, the enhancement prize for new capacity was €56,160 euros per MW per year.

Finally, the total foreign capacity awarded was 4,365 MW, with the majority of this in the North, which saw 4,200 MW allocated for €7,199 euros per MW per year. The South’s figure was 52 MW for €6,500 euros per MW per year; and the foreign Central South’s share was 113 MW for €5,579 euros per MW per year.

Some auction participants have begun announcing contracts already. Irish company Aer Soléir’s CEO and founding partner Andy Kinsella wrote on LinkedIn that the company had competed successfully in the auction securing a 15-year capacity contract for its 250 MW 250MW Rondisonne battery storage project in Piedmont, Italy.

Industry insiders expect that battery energy storage projects have accounted for a cumulative 900 MW (assuming four-hour durations). In the 2027 capacity auction, BESS was actively competing with existing gas plants for the first time.