Energy S.p.A plans 8 GWh battery production site in Italy

Changing electrochemical energy storage regulations will dramatically increase the deployment of Italian BESS, Davide Tinazzi, CEO of renewables equipment maker Energy S.p.A, tells ESS News.

The Italian company, based in the Veneto region, wants to expand a European presence which has already made inroads into Germany, Austria, Switzerland, Belgium, the Netherlands, Luxembourg, and the Nordic nations.

Sant’Angelo di Piove di Sacco-based Energy S.p.A. expects to play a central role in supplying Italian batteries incentivized under a national MACSE energy storage auction and capacity market scheme as well as unsubsidized, “merchant” sites and other energy storage applications requiring high storage capacity and fast responsiveness.

“With the evolution of the regulatory framework and the expected auctions, such as the capacity market and MACSE, the door is also opening for much larger scale installations, above 20 MWh,” said Tinazzi. “In this scenario, Energy [S.p.A.] has developed the ‘Made in Italy’ [energy] storage system, based on lithium-[ferro]-phosphate (LFP), and integrated it into a 20-foot container with 4.4 MWh of capacity. It is a solution entirely developed by Energy [S.p.A.], both in hardware and software, starting with the battery construction. The system is designed to guarantee [grid] stability, security, and high responsiveness, making it adept at active participation in intraday [energy] trading in the merchant segment.”

Italy’s utility-scale BESS currently range in scale from 1 MWh to 10 MWh and take the form of modular systems based on 2 MWh-plus containers. They are suitable for co-locating with solar and wind power sites, and for supporting the grid at “standalone” sites.

Production plans

Pylontech EU (70%) and Energy S.p.A. (30%) set up a joint venture called PylonLife EU. The company’s first production line with a maximum production capacity of 400 MWh per year started operation on March 18. The batteries made at the site will be sold by both Energy Spa and PylonLife EU. 

Pylontech EU, a Dutch-registered company, is a wholly owned subsidiary of Pylontech, also known as Pylon Technologies, which is listed on the Shanghai Stock Exchange. 

Energy S.p.A. is presently working on Phase 2, which involves the construction of an 8 GWh production plant in the same industrial hub. 

“The new plant will serve two main purposes: on the one hand, to start battery production starting directly from the lithium cell package; on the other hand, to enhance the production capacity of large-scale storage systems, also using locally produced batteries. The increased production capacity of containerized systems will be useful to serve large-scale installations quickly,” Tinazzi said. 

The planned, up-to-8 GWh-per-year “gigafactory,” part funded by €7.15 million ($9.47 million) of European Union post-Covid “PNRR” funding for Italy, is set to be operational this year. Energy S.p.A. plans to begin selling large-scale storage systems from the gigafab in 2026.

Energy S.p.A. chief Tinazzi lamented the fragmented nature of the European battery manufacturing landscape and called for a coordinated approach between the industry and EU institutions; incentives to bridge the cost gap on cheaper, extra-European products; simpler regulation; and increased backing for R&D.

Pylontech is producing the cells used in the Phase 1 of the project at the Sant’Angelo di Piove di Sacco factory. 

“This is just the beginning for us,” said the company’s vice president, Geoffrey Song, at the inauguration of the partners’ first production site. “We want to make a long-term commitment.”

Chief executive Tinazzi added, “The [made-in-Italy] batteries are used within the storage systems produced by Energy [S.p.A.] but also sold by PylonLife EU to its incumbent customers in Europe, who at this time are more focused on product sourcing, for a series of reasons.” He said the products made by the PylonLife EU joint venture would likely have a different price point than those sold by Pylontech.

Tinazzi said the testing phase of the first production line lasted about a year before certification was secured, for the factory and products, to be marketed as “Made in EU” devices.

“The packaging of each battery must pass special tests that simulate stresses during transport,” said the Energy S.p.A. executive, who was critical of European environmental requirements. “Well, such tests are relatively easy to pass with the original packaging produced, in China. However, when producing in Europe, the packaging materials must be highly recyclable and the mechanical tests are more difficult to pass. It is just one example … of how the European manufacturer is also disadvantaged in competitiveness by the production obligations that Europe imposes only on itself.”

Energy S.p.A. expects to hold 10% of the Italian residential energy storage market this year and aims to maintain that share in a market showing signs of contraction.

Tinazzi said high inflation affected household budgets last year and constantly falling renewable energy equipment prices prompted delays in purchasing decisions for home solar-plus-storage arrays.

Incentive payments, and a need for businesses to stabilize energy costs, on the other hand, prompted the Energy S.p.A. chief executive to predict an expansion in Italy’s commercial and industrial energy storage market this year.

“Growth will also be affected by the expected effect of incentives such as Transition 5.0, in 2024,” he said, pointing to an Italian government drive to revitalize domestic manufacturing with energy-transition-friendly production equipment. “For utility-scale [energy storage], growth will depend on public support mechanisms but we expect a major increase from 2024.”

*This article was updated on April 23 to reflect the fact that Phase 2 involving the construction of 8 GWh production facility is solely a project of Energy S.p.A. and not of its joint venture with Pylontech EU.