BESS dominate new wins in capacity markets in Italy and Belgium

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Capacity market auctions have concluded in Italy and Belgium and battery energy storage system (BESS) projects won the lion’s share of new contracts.

Belgium awards contracts to 350MW of new BESS projects

The Capacity Remuneration Mechanism (CRM) for 2024 has concluded and nearly all the new capacity granted was forBESS projects, totalling 350MW, analytics and consultancy firm Aurora Energy Research said.

That is for both the Y-4 auction, for delivery in 2028-2029, and the first Y-1 auction, for delivery in 2025-2026.

Some 13 new large-scale projects were selected, including from utility and independent power producer (IPP) Engie and developer-operators Storm and Giga Storage. It brings the total BESS awarded CRM contracts to-date to 1.1GW, Aurora added.

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Engie’s winning project was its 100MW/400MWh Kallo BESS, one of three in Belgium totalling 380MW revealed back in March last year. Engie said the capacity market contract it won starts in 2028, meaning the Y-4, and will run for 15 years.

“This new project is an important step in our drive to increase battery energy storage capacity in Europe and demonstrates the effectiveness of the Capacity Remuneration Mechanism in developing these assets,” Engie VP for flex gen and retail Sébastien Arbola said.

The firm is already building a 200MW/800MWh project in Vilvoorde, Belgium, the largest of the three and one of the largest under construction in Europe.

Aurora added that the CRM also saw wins for gas and pumped hydro energy storage (PHES), with IPP RWE winning one-year contracts for gas in Netherlands and 500MW PHES in Germany, while a ‘low’ 11MW of demand side response (DRS) won too.

BESS wins half of new awards in Italy’s capacity market

Meanwhile, Italian transmission system operator (TSO) Terna published the result of its capacity market recently, which saw 174MW of new contracts awarded to energy projects.

Three BESS projects won a little over half of that capacity, at 89MW in total, while thermal generation units won 85MW of new capacity.

Those three BESS contracts were 31MW/62MWh to the ‘Central EP Tavazzano Monstanaso’, 44MW/88MWh to ‘EP BESS Fiume Santo’, and 14MW/42MWh to the ‘MYT Apulia Storage 3’. The first two are 2-hour duration contracts, while the third is a 3-hour contract. They are located in the North, Sardinia and South electricity market zones respectively.

The capacity market auction brought the total projects contracted by Terna to 42.1GW, across all technologies. Utility and IPP Enel is by far the largest with 10.5GW contracted. The firm has been an early mover in Italy’s grid-scale energy storage market with over 1GW of BESS under construction after big capacity market wins in 2022.

In concurrent news, developer Emeren has continued its BESS activity in Italy with the sale of three projects totalling 300MW to investor Arpinge, in southern Italy. It has previously developed and sold BESS projects in Italy to another investor, Matrix Renewables.

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