Italy Energy Storage
To meet the European Union (EU)’s energy and climate greenhouse gas emissions targets by 2030, EU countries need to establish a 10-year integrated national energy and climate plan between 2021 and 2030. Italy has one in place called PNIEC. PNIEC aims for renewables to contribute to 40% of gross final energy consumption by 2030 (they currently account for less than 20% of that total), and specifically to make up 65% of electricity consumption by 2030 (they currently account for about 35% of that total). Installations of new renewable energy plants in Italy almost doubled from 2022 to 2023, from 3 to about 6 GW, mostly in the photovoltaic sector.
As Italy’s energy mix is increasingly composed of variable renewable energy sources, electricity storage will be needed to integrate power generated by renewables into the national grid and make it available when sun and wind energy are not accessible. In addition, electricity storage is critical to avoid congestion in the power grid since most of the renewable production originates in Southern Italy but is consumed mostly in the north. Therefore, PNIEC also provides for the installation of new energy storage infrastructure with the aim of reaching 22.5 GW of installed storage capacity by 2030.
PNIEC envisages the 2030 energy storage scenario to consist of 8 GW of hydroelectric pumping systems (most of which are already in place), 4GW of distributed energy storage systems (i.e. smaller scale storage systems integrated with residential, mostly photovoltaic plants – many of these distributed energy storage systems are also already in place) and 11GW of stand-alone utility scale storage facilities (which need to be developed). Therefore, battery energy storage systems (BESS) are needed in Italy.
The Italian market for BESS is growing rapidly and currently amounts to 2.3 GW but it almost exclusively consists of residential scale systems, associated with small scale solar plants, having a capacity of less than 20 kWh. More in detail, 311,189 storage systems were present in Italy in mid- 2023, with a total power of 2,329 MW and a maximum capacity of 3,946 MWh. Terna (the high voltage grid operator) also holds systems totaling 60 MW in power and 250 MWh in capacity. Almost all (92%) of the systems are < 20 kWh in size with a clear predominance of systems with capacities between 5 and 10 kWh (33%) and between 10 kWh and 15 kWh (36%).
The main configuration used is “DC generation side,” covering 88% of the total, while “AC generation side” and “post generation side” cover 5% and 8%, respectively. 99.9% of the systems are combined with a photovoltaic plant, which in nearly all cases (99.6%) is residential scale. Lombardy is the region with the largest number of installed systems (62,222, totaling 448 MW and 753 MWh capacity), followed by Veneto (44,661, totaling 330 MW and 608 MWh capacity) and Emilia-Romagna (31,382, totaling 240 MW and 379 MWh capacity).
The utility scale sector instead is still in its infancy and suffers from regulatory uncertainties, supply difficulties and increasing costs. However, strong growth is forecasted in the next few years due to Italy’s ambitious PNIEC goals. Growth expectations are confirmed by 2022 and early 2023 data, which indicate numerous and increasing requests for connections of utility scale energy storage systems to the national electrical network, almost doubling in just 6 months.
To develop utility-scale electricity storage facilities, the Italian Government set up a scheme that was approved by the European Commission at the end of 2023. Italy will promote investments in utility scale electricity storage to reach at least 70 GWh, and worth over Euro 17 bn, in the next ten years. The new storage capacity will be acquired through tenders published by Terna, the manager of Italy’s high voltage grid. The next tender will be released in 2024. For the time being, storage solutions admissible to the tenders will be lithium-ion batteries and hydroelectric pumping and also (10% of the total) other types of technologies, but Terna will update at least every two years its analysis of reference technologies.
Local industry contacts, as well as U.S. sector firms, have also indicated to Post that there is a need for energy storage solutions in Italy. U.S. entrepreneurs interested in the Italian energy storage market and seeking representation and information on how the U.S. Commercial Service can assist U.S. companies should reach out to: federico.bevini@trade.gov . Companies that believe they are qualified for Terna’s upcoming utility scale storage capacity tender may qualify for USG Advocacy and should contact the U.S. Commercial Service for more information.