‘Italy is Europe’s most interesting battery market’

Italy is the most interesting European battery market, followed by Great Britain and Germany, according to a report released earlier this week by UK-based analyst Aurora Energy Research which examined 28 European countries.

Italy placed top for its 50 GWh battery capacity target, set for 2030, and because it has already enabled BESS to participate in the market for providing ancillary services to bolster grid stability.

“We expect 10.5 GW [of battery projects] to be added in Italy by 2030, of which 3 GW are already in an advanced stage so they will probably come online within the next two to three years,” said Eva Zimmermann, senior associate for flexible energy at Aurora.

Talking to pv magazine Italia, Zimmerman said the volume of BESS projects sought in the nation’s first “mercato a termine degli stoccaggi” (MACSE) energy storage auction have been defined. She added, battery business opportunities related to the supply of grid-strengthening ancillary services, and to energy arbitrage – charging batteries from the grid when electricity is cheap and discharging when prices are high – are already profitable.

The Aurora associate stressed, however, Italy will not play a central role in fortifying grids at a European level because the nation’s grid is not “well connected, due to its geography.”

Italy is also inactive on the European Union’s Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation (PICASSO) system, said Zimmerman. PICASSO is part of the European Union’s plan to harmonize member state grids to create an EU-wide market for balancing power.

Aurora has estimated the 10.3 GW of utility-scale BESS installed in Europe, up to October, will hit 55 GW by 2030 and reach 126 GW by 2050.

“After Italy, the UK follows, supported by a strong installed capacity of 4.3 GW, an established battery industry which is estimated to more than double to 10.6 GW, and attractive revenue streams that strengthen its position,” the consultancy has stated. “Germany, which overtook Ireland and its I-SEM [Integrated Single Electricity Market for Ireland and Northern Ireland] as the largest market, ranks third thanks to its strong market outlook and ambitious renewable energy targets.”

Aurora estimates European batteries could constitute a EUR 100 billion ($105 billion) investment opportunity through 2050, including repowering projects, which involve upgrading existing energy generation and storage facilities.

“The grid-scale energy storage market continues to be strong, with investment pipelines growing due to promising opportunities,” Aurora has written. “However, battery markets have complex revenue and cost dynamics and European markets differ in size, revenue streams, and risk levels. This is also evident when comparing our core markets, Italy and the UK: While Italy offers the opportunity to enter the market as a developer looking for greenfield projects, the UK pipeline is full, making it attractive only to investors in more advanced projects.”

From pv magazine Italia.