Italy increases battery storage capacity by 50% year on year, Czech Republic still waiting for its main boom

Italy has made significant progress in developing new battery energy storage systems (BESS). According to the country’s transmission system operator, Terna, the installed capacity of battery systems rose by approximately 50% year on year to 17.4 GWh. Further substantial growth is expected. The Czech Republic is still awaiting its boom, with large projects only at the preparation stage.

By the end of the third quarter, Italy had increased BESS capacity in the country by around 50% year on year, from last year’s 11.4 GWh to 17.4 GWh. According to the grid operator, this increase was driven primarily by large-scale projects, which are spread across a total of 849 thousand installations.

Despite the steep year-on-year increase in capacity, further significant and much-needed development is expected in the coming years. Italy, through Terna, recently awarded contracts for the development of BESS with total capacity of 10 GWh. More than half of the new capacity will be built by Italian energy giant Enel.

The auction works by granting developers, based on the auction results, an average annual payment of nearly EUR 13 thousand for every MWh of BESS capacity made available to the grid operator. As the support is awarded for 15 years, it substantially reduces investment risk for developers and makes it easier to secure bank financing for their projects. For the state, it provides greater certainty that the planned capacity will actually be built. It is also worth noting that Terna set the auction price cap at EUR 37 thousand/MWh.

Meanwhile, the Czech Republic is still waiting for a boom in battery storage installations – meaning a boom in large-scale projects. The first such projects and standalone BESS have been announced, and in a small number of cases are already being implemented. Major domestic players have ambitious BESS plans, including ČEZ, Sev.en, C-energy and MND.

The development of BESS in the Czech Republic is to be supported by investment aid rather than operational support. The State Environmental Fund (SFŽP) launched investment support through the Modernisation Fund totalling CZK 2 billion. Time will tell how much capacity will actually be installed from the awarded funding, as in the case of awarded investment support for solar PV. Investment support alone may not be sufficient to ensure a project’s economic viability.