The future of Italy’s electricity market is expected to involve a significant reliance on battery energy storage systems (BESS), according to Valerio Covicchio, country manager for WHES, in a recent discussion with pv magazine Italia. With Italy’s new solar capacity coming online, Covicchio predicts that by April, the nation will experience no negative electricity price periods, thanks to the widespread adoption of BESS. He highlighted recent changes in market pricing, including a shift from hourly to 15-minute pricing that enhances market granularity and reflects real-time operational challenges in energy production and consumption.
Covicchio elaborated on the implications of more granular pricing in the day-ahead market, stating that this change enables energy producers to respond more dynamically to fluctuations in demand and supply. With these details being captured more efficiently, factors like sudden weather changes can now directly affect the pricing of electricity generated from photovoltaic systems. This four-time granularity implementation, driven by European regulations, aims to create a unified market structure across Europe, allowing for better price alignment and capacity management.
He noted that substantial additions of photovoltaic capacity could increase price volatility, especially during peak production hours. Covicchio underscored the strategic importance of BESS in managing this energy generation, as they provide value through enhanced arbitrage opportunities, leading to increased revenue potential during periods of price fluctuation. The move towards zonal pricing, which replaces the national average pricing model, could further differentiate energy costs across regions, highlighting the benefits of BESS for both consumer and industrial markets.
As Italy is poised to receive 5 GW of new solar energy coinciding with traditionally low electricity demand in spring, Covicchio anticipates that energy prices may reach zero during peak sunlight hours. This scenario is realistic with the current capacity and demand dynamics and could affect the energy market significantly by encouraging greater renewable integration while ensuring a more reliable supply.
The future is leaning towards the idea that every photovoltaic system will likely come equipped with a battery. Currently, investments in BESS appear to offer better economic returns than those solely in photovoltaic systems, as they enable enhanced grid reliability and profitability. Covicchio emphasized that adapting to the growing dependence on BESS is crucial for both energy producers and investors, fostering a more robust and responsive electrical market.
He acknowledged that external factors, including political and economic shifts, could alter projections for electricity demand and softening captured prices. Customer demand can vary unpredictably across different times, highlighting that high demand periods may not always correspond simplistically to supply levels. The impact of new data centers on the energy market in Italy remains uncertain as many larger renewable projects vie for attention, but Covicchio believes the future demand for electricity will evolve significantly and impact energy capture prices.
Ultimately, the interplay between emerging technologies, market changes, and external economic influences will shape Italy’s energy landscape, placing BESS at the forefront of that transition.