BESS optimization
in Italy

• Wholesale (DA, ID, IDC)
• Ancillary services (FCR, aFRR)
• Imbalance market
• Capacity market (as a top-up for BESS)

Italy represents one of the most attractive markets in Europe for BESS investment, driven by a combination of contracted revenue mechanisms and merchant optimization opportunities. A key feature of the Italian market is the availability of long-term contracted revenues through the Italian capacity market and emerging storage-specific mechanisms, such as MACSE. These provide a bankable revenue floor, particularly for new-build assets, while still allowing participation in merchant markets. Italy also applies a relatively favorable de-rating regime for batteries, enabling a significant share of installed capacity to qualify for capacity payments, especially for short- to medium-duration systems.

Italy’s generation mix — characterized by a high share of gas-fired generation combined with rapidly growing solar capacity — creates persistent arbitrage opportunities. These are further shaped by the country’s zonal market design, which provides transparent and persistent locational price signals, albeit with exposure to congestion between zones. In addition to wholesale markets, such as Mercato del Giorno Prima (MGP) and Mercato Infragiornaliero (MI), BESS assets can participate in balancing and dispatch markets (MSD/MB), which can contribute materially to revenues in a cross-market optimization strategy.

Compared to more purely merchant markets, Italian revenues tend to be more structured and multi-layered, combining contracted income with shorter-term optimization. While day-ahead spreads may be less volatile than in markets like Germany, additional value can be captured through intraday and balancing market participation, where optimization sophistication becomes a key differentiator. For example, incorporating intraday trading into the commercial strategy could have brought an average uplift of approximately 14% in gross margins in 2025.

Overall, Italy offers a hybrid revenue model for BESS, combining long-term contracted income with merchant upside. This structure reduces downside risk and supports project financing, while still requiring advanced optimization capabilities to maximize returns. However, returns remain sensitive to the evolution of market mechanisms, competition in ancillary services, and the pace of BESS deployment, which rewards first movers.

5 MW and up.

A co-located battery is installed alongside renewable generation, typically solar or wind. We optimize both standalone and co-located batteries. If you're planning a co-located project in Italy, contact us here to discuss the specifics.

enspired doesn't provide in-house revenue structures in Italy, but we offer support in finding the model (tolling, floor, etc.) that suits your business case best together with financing partners.