NatPower and Tesla have signed a multi-year supply and execution agreement covering more than 25GWh of battery energy storage systems (BESS) across Italy and the UK.
Under the agreement, Tesla will supply its Megapack battery storage systems, alongside engineering, procurement, and construction services and bankable trading services through its Autobidder platform, with long-term revenue warranties. NatPower will own and operate the projects.
The deal covers five initial projects across the two countries, forming the first delivery phase of a broader programme targeting more than 100GWh of total storage capacity. Aggregate construction value across the full scope is estimated at US$4-5 billion, with projected revenues exceeding US$15 billion over 20 years.
NatPower CEO Fabrizio Zago said the deal addresses a structural problem in battery storage deployment that has persisted despite capital and technology being available.
Try Premium for just $1
- Full premium access for the first month at only $1
- Converts to an annual rate after 30 days unless cancelled
- Cancel anytime during the trial period
Premium Benefits
- Expert industry analysis and interviews
- Digital access to PV Tech Power journal
- Exclusive event discounts
Or get the full Premium subscription right away
Or continue reading this article for free
“The sector has access to technology and capital, but still struggles to deliver infrastructure consistently and within the required timelines. What we have built with Tesla is an ecosystem that enables alignment between capital and execution, and that can be replicated across multiple markets,” Zago said.
Mike Snyder, VP of energy and charging at Tesla, said the company’s “vertically integrated offering, providing hardware, software, construction, trading optimisation and service” is designed to bring projects online faster and ensure they operate through the full product lifetime.
The agreement is structured to address five operational requirements simultaneously: manufacturing capacity reservation, grid access and connection, permitting and regulatory compliance, financial structure, and execution scheduling.
NatPower describes it as the first time BESS procurement, financing and execution have been coordinated across multiple jurisdictions under a single integrated framework, linking manufacturing allocation directly to project delivery.
The companies positioned this as moving beyond what it describes as an “opportunistic and local approach” that has characterised large-scale storage procurement to date.
A deal that tests Tesla’s production capacity
At 25GWh, the initial phase of the NatPower agreement is one of the largest single BESS procurement contracts announced in the European market.
Tesla’s Megapack factory in Lathrop, California, has an annual production capacity of approximately 40GWh, meaning the NatPower order accounts for roughly 62.5% of that annual output if fulfilled within a single production year.
The deal will require sustained manufacturing allocation and underscores why Tesla has been expanding Megapack production capacity.
The agreement arrives as Tesla’s energy storage business has been navigating a period of mixed quarterly performance. Tesla recorded a 15% decline in quarterly deployments and a 12% year-over-year drop in energy division revenues from Q1 2025 to Q1 2026, a reversal from the record deployment figures posted in 2025.
The NatPower agreement provides a visible, long-dated pipeline of contracted volume that partially addresses investor concerns about near-term revenue visibility in the energy division.
That 2025 performance itself followed a period of sustained growth. Tesla’s energy storage deployments jumped in 2025, a year the company described as crucial for AI-driven transformation. However, it also flagged margin compression in 2026 as competition in the utility-scale storage market intensifies and pricing comes under pressure from Chinese manufacturers.
The NatPower deal, which bundles hardware with software, construction, and long-term trading services, is consistent with Tesla’s stated strategy of moving toward higher-margin integrated service offerings rather than competing solely on Megapack unit price.
Italy and the UK are two of Europe’s most active markets for grid-scale battery storage.
Italy has seen a rapid buildout of standalone BESS capacity driven by capacity market incentives and the need to manage increasing curtailment from its expanding solar fleet, while the UK’s Capacity Market and Balancing Mechanism provide multiple revenue streams that support project financing for large systems.
Both markets have benefited from falling battery costs and improving grid connection processes, though permitting and connection timelines remain constraints on delivery speed in both jurisdictions.
The Autobidder trading platform Tesla is providing under the agreement is already deployed across Tesla’s existing European Megapack installations, giving NatPower access to an optimisation system with a live operational track record rather than an untested market offering.
Tesla and Sungrow topped the most recent bankability ratings for battery storage system suppliers, with lenders and independent engineers assigning the highest confidence scores to both companies’ technology and financial stability – a standing that gives NatPower’s lenders added comfort when underwriting a multi-project, multi-jurisdiction financing of this scale.
NatPower, meanwhile, is a privately-held developer launched in 2022 by CEO Zago and co-founder Stefano Sommadossi. In August last year, the company revealed that it is planning a 1GW/8GWh UK BESS project with the local subsidiary of Singapore’s Sembcorp, representing around £1 billion in private investment. This followed two other gigawatt-scale UK projects for which NatPower submitted planning applications at the beginning of 2025, although that pair would be 4-hour duration each (1GW/4GWh).
