Battery storage prices in Italy

The research and analysis conducted for this report were supported by the European Climate Foundation. This report is part of a series that analyses the battery storage market in select European countries. Italy has both a rapidly growing utility-scale market as well as a flourishing customer-sited battery storage market.

Customer-sited storage adoption has been mainly driven by a combination of high electricity prices and generous tax incentives. For utility-scale systems, Italy has established favourable electricity market rules that enable projects to earn revenues from a range of different sources.

Of the total, 500MW is in Sardinia. Taibi says this quantity of battery storage winning capacity market contracts came as a bit of a surprise to everyone, and was driven by the impressive capex reduction the technology had achieved in the years leading up to it.

As electricity prices continue to rise and Italy accelerates its shift toward renewable energy, reliable and efficient energy storage has become essential for both homeowners and businesses.

The remaining 3–4 GW is expected to come from utility-scale systems. By 2050, Italy aims to achieve 30-40 GW of storage capacity. There are significant regional differences in the adoption of battery storage systems across the country.

Italy's high electricity market prices are largely driven by its heavy reliance on fossil gas for power generation. In Italy, the government and the Italian TSO (Terna) have developed several electricity market products where storage projects are able to compete and provide services to the power system.