M for MACSE

Energy storage facilities — namely batteries and other systems capable of storing electricity — will play a decisive role in the future of the power system. The growing spread of renewable sources such as solar and wind, which by their nature are intermittent, makes it necessary to be able to store excess energy produced during periods of high generation so that it can be made available when needed. In this way, renewables can be used more effectively while at the same time ensuring the security and reliability of the grid. To meet this need, Terna has defined a regulatory framework—based on guidelines from ARERA, the Regulatory Authority for Energy, Networks and Environment, approved by the Minister for the Environment and Energy Security in October 2024, following approval by the European Commission in December 2023—aimed at developing a new instrument called MACSE, an acronym for the Electricity Storage Procurement Mechanism.

This mechanism is designed to facilitate the integration of renewables and to efficiently manage so-called overgeneration phenomena, which occur when electricity production exceeds demand, as well as to provide time-shifting services, whereby this energy is returned to the system during periods of shortage. MACSE operates through competitive auctions organized by Terna itself, the national electricity grid operator. Operators intending to build new storage facilities can participate in these auctions. Those who win commit to constructing the plant and making the storage capacity available to other operators through a dedicated platform of the GME (Gestore dei Mercati Energetici – Energy Markets Operator), a company of the GSE (Gestore dei Servizi Energetici – Energy Services Operator), which is responsible for organizing and managing Italy’s energy markets in a transparent and competitive manner.

The framework submitted by Terna and approved by the MASE focused in particular on lithium-ion batteries and other “non-reference” electrical storage technologies. This term refers to all facilities other than lithium-ion batteries themselves and traditional hydroelectric storage. The auction procedure enabled Terna to enter into long-term contracts with companies in the sector (15 years for batteries), with the aim of equipping the electricity system with the storage facilities needed over the coming years. This is a crucial aspect, especially in light of the rapid growth of renewable sources: around 3 GW of new wind and solar capacity were installed in 2022, a further 5.8 GW in 2023, another 7.5 GW in 2024 (in addition to approximately 3.1 GW in the first half of 2025).

The entities that win the individual tenders then have three main obligations: to build the facility, to make the storage capacity available for trading on the energy market, and to offer the storage capacity on the MSD, the Dispatching Services Market, which is the tool used to balance electricity supply and demand in real time in order to keep the grid stable. In return, those who build and operate these storage systems are entitled to receive from Terna the fixed annual premium offered in the auction, as compensation for the investment and for the service provided to the electricity system.

On 30 September 2025, the first MACSE auction took place, through which Terna awarded 10 GWh of storage capacity, equal to 100% of the required demand. The auction was carried out for four distinct areas: Centre-South, South and Calabria, Sicily, and Sardinia. For each of these, Terna defined the minimum and maximum quantities to be procured. The facilities contracted in the first MACSE auction — lithium-ion batteries — will come into operation in 2028. The auction results showed significant market interest, with bids exceeding demand by more than four times, confirming the need for a balanced energy development plan focused on strengthening storage capacity. The weighted average award price was around €13,000/MWh-year, well below the reserve price (€37,000/MWh-year).

The first MACSE auction also demonstrated two key points. First, that if well designed, competitive long-term contracting mechanisms can genuinely foster the development of the storage sector. They make it possible to separate market risks from industrial risks, facilitating access to low-cost capital with a lower risk appetite that would otherwise remain excluded. Second, that the forward mechanisms introduced in Italy are now capable of generating prices fully aligned with market values. Renewable energy sources, in fact, require revenue-stabilization instruments to support the country’s energy independence and to help reduce energy costs.

As far as storage is concerned, Italy currently has more than 800,000 installations with a total capacity exceeding 11 GW. Moreover, in the 2024 Scenario Description Document, the company estimated a need for around 70 GWh of new storage capacity by 2030 (additional to existing pumped-storage plants) to enable the integration of renewable energy sources. The 10 GWh of new capacity awarded through the MACSE auction will be added to the 17 GWh already in place. Thanks to MACSE, therefore, the target for storage capacity also appears to be within reach. This highlights how essential coordinated development of grids, renewables, and storage facilities is to manage the electricity system safely and efficiently, and to achieve the objectives of the PNIEC (italian National Integrated Energy and Climate Plan), which foresee an increasing installed wind and solar capacity to 107 GW by 2030 (+53 GW compared with August 2025).