Italy Raises MACSE Storage Auction Price Cap to €27,000/MWh

en.Wedoany.com Reported - On September 24, Italy's energy regulatory authority ARERA adopted Resolution 332/2026/R/eel, setting the maximum premium for the next MACSE long-term energy storage capacity auction at €27,000 per eligible MWh per year, up from the €22,000/MWh proposed in the July consultation document. The auction is scheduled for November 24, with a delivery year of 2029, and applies to new storage capacity meeting MACSE requirements.

The adjustment to the maximum premium in this round mainly stems from an upward revision of the benchmark investment cost. During the July consultation phase, ARERA calculated based on a benchmark investment cost of €125,000/MWh, while the final resolution raised this parameter to €150,500/MWh; the benchmark investment value used to calculate the maximum premium, after further including overplanting and construction costs, reached €189,790/MWh. The weighted average cost of capital was also adjusted from 8.0% to 8.2%, and fixed operating costs were recalculated in line with the investment cost.

MACSE adopts a pay-as-bid model, under which winning storage projects receive the fixed premium determined by their bids over a 15-year contract period, with €27,000/MWh constituting only the upper limit for permitted bids. The capacity for which projects receive compensation is calculated in terms of "eligible MWh" rather than directly based on the nameplate storage capacity of the equipment, so the actual fixed revenue a project can obtain also depends on the eligibility coefficient. For an 8-hour storage project with a nominal capacity of 600 MWh and a power rating of 75 MW, if the eligible capacity is 552 MWh, the fixed revenue converted to nameplate capacity under the maximum premium would be approximately €24,840/MWh·year.

The maximum premium also determines the scale of guarantees required for projects to participate in MACSE. Under the current mechanism, the pre-auction deposit is 10% of the maximum premium, corresponding to €2,700 per eligible MWh; after winning the auction, the deposit and related funding requirements increase further. For a reference project with 552 MWh of eligible capacity, the peak guarantee funding is approximately €6.71 million. Exit fees, unavailability penalties, and partial variable payment caps are also linked to the maximum premium.

ARERA had previously issued Consultation Document 283/2026/R/eel on July 30, proposing the maximum premium calculation methodology for the second MACSE auction for the 2029 delivery year, and closed the comment period on September 7. This Resolution 332/2026/R/eel finalized the formal determination of this price parameter. MACSE is Italy's long-term energy storage capacity procurement mechanism, organized and implemented by Terna, which procures new electricity storage capacity through multi-year contracts.