How MACSE is optimizing the Italian market
Italy’s new MACSE mechanism, recently approved by the DGCOMP, is set to procure the bulk of long-duration storage. We give you a quick overview at how MACSE is set to optimize the Italian BESS market.
Legislative support for energy storage systems
In response to this necessity, Legislative Decree 210/2021, implementing EU Directive 2019/944, introduced a new electrical storage capacity procurement system. This system aims to integrate renewable energy sources with an efficient level of “overgeneration” in the electricity system.
Future storage capacity requirements
Pursuant to Legislative Decree no. 210/2021 and ARERA’s Resolution 247/2023/R/eel, Terna initiated a consultation on the MACSE electricity storage capacity procurement mechanism on 31 October 2023. This mechanism aims to acquire new storage capacity through multi-year supply contracts awarded via competitive auctions. These auctions, organized by Terna, will categorize by technology and offer pooled storage capacity to third parties on a new centralized trading platform managed by GME.
Selected participants will receive a fixed monthly premium from Terna throughout the delivery period, which ranges from 12-14 years for lithium-ion batteries to up to 30 years for pumping systems. Participation requirements include compliance with specific subjective and objective criteria and the provision of significant pre-bid, post-auction, and guarantee fund amounts.
Second consultation and regulatory updates
A second consultation conducted by Terna between April 12th and May 3rd incorporated feedback from the European Commission’s decision of 21 December 2023 and previous consultation phases. Key changes include the elimination of price limits on MSD bids, obligations to return price differences, and area-specific quota limitations.
The mechanism is exclusively applicable to stand-alone systems not combined with production plants. Following this second consultation, Terna will seek final regulatory approval from the Ministry of Environment and Energy Security (MASE), with the first tender expected in 2025.
Conclusion
The MACSE mechanism will promote the development of new storage capacity, essential for integrating renewable sources into the energy system and managing overgeneration. Adequate storage capacity is crucial for the significant growth of non-programmable renewable sources and the system’s flexibility needs, especially with the progressive divestment of thermoelectric capacity. The availability of time-shifting products will also enable operators to manage profile risk more efficiently, ensuring greater integration of renewables into the spot market dynamics.