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Enel sells 49% stake in Italy BESS projects to Sosteneo for €1.1 billion

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Utility and IPP Enel has sold a 49% stake in its subsidiary that will own and operate 1.7GW of battery energy storage system (BESS) projects in Italy, to investor Sosteneo.

Sosteneo will take a 49% stake in Enel Libra Flexsys with parent company Enel Italia S.p.A holding the remaining 51%, retaining control over the company. The deal, which will see Sosteneo’s ‘Sosteneo Fund 1 HoldCo S.à.r.l’ pay €1.1 billion (US$1.19 billion) for the stake, values Enel Libra Flexys at €2.5 billion.

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The transacted vehicle will see through the construction, ownership and operation of a portfolio comprising 23 battery energy storage system (BESS) projects as well as three renovations of open cycle gas turbine (OCGT) plants totalling 0.9GW.

The deal is part of Enel’s partnership business model outlined in its business plan for 2024-26. Enel has been a first-mover in the BESS market in Italy, winning the vast majority of the BESS project awards in early 2022’s capacity market auction, on which it started construction last year for 2024 delivery.

The deal still needs to be cleared by Italy’s competition regulator and Italy’s council of ministers, and is expected to close in the first half of 2024. The ultimate price paid by Sosteneo will depend on “an adjustment mechanism customary for these kinds of transactions,” Enel said.

Italy is one of the most eagerly-anticipated markets in Europe, with gigawatts of deployments expected over the coming few years. The challenges and opportunities, including an EU-funded capacity market auction specifically for energy storage (called MACSE), were discussed in detail on a panel at last month’s Energy Storage Summit EU 2024 in London (Premium access).

Outside of Italy, Enel is also very active in the energy storage markets in the USA and Chile, recently bringing online 555MWh of projects and starting construction on a co-located 67MW project in each market (respectively).

One of its BESS projects also won in a recent auction run by Greece (similar to Italy’s) while last year it proposed several large-scale BESS projects in Spain as well, one 60MWh and one 38MWh, both co-located with solar.

Sosteneo for its part owns one of the largest BESS projects by MW power in Europe, the 100MW/100MWh transmission-connected Richborough BESS in the UK, which came online in late 2023.

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