Italian grid operator awards 250 MW of storage in pilot auction

Italy's grid operator, Terna, has awarded around 250 MW of capacity in its energy storage auction, held last week. The auction is part of the company's Fast Reserve pilot project, dedicated to the participation of large scale batteries in the dispatching services market.

The auction was largely oversubscribed, with the offer being six times higher than demand, Terna said, adding that storage systems totaling 118.2 MW were selected for Northern and central Italy, at a weighted average price of approximately €23,500/MW/year and that another 101.7 MW was assigned in Southern Italy. at a price of €27,300/MW/year. Furthermore, 30 MW of batteries were selected in Sardinia at a price of €61,000/MW/year. The auction concluded at average prices equal to about one-third of the reserve price.

Overall, 23 projects were assigned to 17 operators. The procurement exercise “confirms the strategic nature of the electrochemical storage technology and the great interest of the market for such an innovative project which will allow an increasing number of resources to contribute to the flexibility and safety of the national electricity grid,” the grid operator stated. 

These will be Italy's first batteries to provide ultra-fast frequency reserve, which is a technology-neutral service that Terna defines as crucial for the regulation and stability of the grid. “Fast Reserve is a bidirectional service (upward and downward) and consists of providing a continuous and automatic response in terms of active power, proportional to the frequency error, within 1 second after the event that caused the activation,” Terna specifies online.

The Italian grid operator launched its first, 40 MW storage project under the Defence Plan for the Security of the Italian Electricity System 2012-2015, So far, only 18.2 MW of storage technologies were deployed, commissioned at different times.