Italian lender: Banks will tolerate 10% merchant operation of MACSE-tendered batteries

The MACSE is an important instrument, perhaps the most important in Europe for BESS, and has the potential to influence the structure of the storage market. In Italy at least, a trend toward a highly regulated BESS market is evident.

“We currently have a large number of contacts and numerous proposals that we have submitted to operators,” said Luca Matrone, head of energy industry at Intesa Sanpaolo’s Istituto Mobiliare Italiano corporate and investment banking division. Speaking at the Italia Solare conference in Milan, Matrone said, “The financing phase will only be finalized following the outcome of the tenders. There is very significant demand, with portfolios primarily focused on MACSE and marginally on capacity market and tolling agreements, which will instead emerge more fully after the MACSE.”

Matrone said the regulator is incentivizing banks to adopt sustainable assets via the Green Asset Ratio and climate risk disclosure obligations lenders are subject to.

Stefano Cavriani, founder of EGO Energy and advisor to Italia Solare, said MACSE projects – which can be hybrid sites featuring auction-determined subsidies and merchant operation – could have a portion of their capacity devoted to merchant sales or tolling. The latter would have a risk profile similar to that of the MACSE as it is a tolling program, said Cavriani.

Intesa Sanpaolo’s Matrone said banks would be willing to consider a limited merchant component, which he estimated at around 10%.

MACSE sites will be just part of Italy’s BESS market, according to Elemens Partner Salvatore Casa. He said, “I expect that many plants that remain outside the MACSE will look for alternatives” and added, MACSE projects “will certainly be very competitive at auction, with prices seeing sharp drops to values ​​that are very far from even the initial proposed cap of €32,000 per megawatt-hour.” Industry insiders expect that figure to fall below €25,000/MWh.

While the MACSE auction is much anticipated, it can still be improved, according to Italia Solare attendees.

Fabio Zanellini, energy market and regulations manager at Neoen Renewables Italia – and coordinator of the storage systems and hydrogen group at Italia Solare – addressed the issue.

He told the event, “This is the first auction so it’s normal that there are aspects that can be improved. The FAQs were very helpful: We understood the concept of maximum capacity as well as … change-of-ownership of the asset. However, it would have been useful to have these clarifications at the end of spring, beginning of summer. Another new development that has confused operators [is] the target duration of eight hours. In the latest update, the duration was reduced to four hours. This required a reorganization of … business plans. Another element is the possibility of developing hybrid systems, with MACSE and merchant parts. There is uncertainty regarding this possibility, both in the sizing phase and in the real-time management phase, for which the operating rules still need to be defined.”

From pv magazine Italia.