The O&M challenge facing Italy’s MACSE auction low bidders

A few days after the results of Terna’s first MACSE auction were published, pv magazine Italia spoke with market stakeholders who expressed satisfaction with the exercise and offered thoughts on new market trends.

Raffaello Teani, president of the Associazione Nazionale dell’Industria Elettrotecnica (ANIE) federation’s Storage Systems Group, said the auction results represent an extremely positive signal for the storage systems market and the national energy system. He added, the MACSE auction should not be considered a point of arrival but rather a path that can make the Italian electricity system more open, competitive, and inclusive.

“The allocation of 10 GWh of storage capacity, against a backdrop of supply that is more than four times greater than demand, highlights the technological maturity of the sector and the growing interest of operators in solutions that strengthen the flexibility and resilience of the electricity grid,” said Teani.

Reflection on key aspects of the MACSE program will now be necessary for policymakers, said Teani, adding, “In particular, we believe it is essential to evaluate how to expand the number of projects eligible for the award, both in terms of available quota and maximum plant size. This would increase the overall reliability of the outcome and reduce systemic risks in the event of critical issues with individual projects.”

In terms of the effects of the auction on the Italian storage market, Teani said, “It’s important to understand how this new market can generate widespread and sustainable opportunities for the entire industrial supply chain, encouraging broader and more balanced participation, including through corrective measures such as capacity caps for individual operators, which have already been successfully tested in the fast reserve [market].”

Asked about the project that withdrew after being granted only partial MACSE funding, Teani said it was a small facility and added, “In any case, the rules stipulate that that quota will be requalified at the next auction. Essentially, it’s not a problem but a physiological issue.”

O&M activity

Matteo Lionetti, head of global tech sales at NHOA Energy, drew attention to the O&M aspect of MACSE plants, something which has not attracted attention, and drew a parallel with the Fonti di Energia Rinnovabile (FER) X auctions and the Fondo Europeo de Desarrollo Regional (FEDER) tender in Spain.

Lionetti told pv magazine Italia: “It’s a positive element that the tender winners are structured and reliable operators: a result that is not a foregone conclusion since this is the first MACSE auction guided solely by economic criteria, and therefore potentially open to very aggressive players. Given the little, or no margin for error left to operators by the low tariffs at which the plants were awarded, the challenge now lies in choosing contractors and technology suppliers: they will not only have to build the BESS [battery energy storage system] plants ‘on time, on budget,’ but also maintain them for their entire useful life, ensuring high performance, high availability, and minimal impact of opex [operational expenditure] on the business case.”

Lionetti added, “Until now, much focus has been on the capex [capital expenditure] aspect of the awarded projects but I expect that O&M activities will be equally crucial to the success of these projects, and therefore that the availability of efficient and well-established structures throughout the country will prove to be a key criterion for selecting contractors and technology partners.”

For that reason, the NHOA Energy representative said, he will monitor with interest the FER X Transitorio tender, “in which, for the first time, the requirements of the European NZIA [Net-Zero Industry Act] will be applied in Italy, with origin requirements for the main photovoltaic components,” and also the Spanish FEDER, “which aims to incentivize the development of storage in the country, including increasing reward criteria based on the EU content of the proposals.”

Relatech SpA Executive Chairman and Founder Pasquale Lambardi was on the same wavelength as NHOA Energy’s Lionetti.

“Italy has opened the regulated storage market: this is the first step toward a large-scale national battery infrastructure,” said Lambardi. “The competition, with supply four times greater than demand, demonstrates that there is an industrial ecosystem ready to invest. For Relatech, this means that, over the next three to five years a structured demand for digital technologies to support storage will emerge, and those who can position themselves as a key partner today will be able to capture a significant share of the value.”

For Relatech, there are numerous implications: with the target market growing, digitalization; monitoring; IoT [internet-of-things]; AI [artificial intelligence]; and cybersecurity solutions will become essential to manage gigawatts of batteries spread across the country, and each storage facility requires supervision systems, predictive maintenance, edge computing, and integration with transmission system operator Terna.

From pv magazine Italia.