The Energy Storage Report 2024

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NHOA says capacity market contract award by Italy’s grid operator ‘opens doors for future projects’  


Energy storage system integrator NHOA has been selected to deliver a large-scale battery energy storage system (BESS) which will play into Italy’s capacity market.

The 39MWh project, which will be deployed at an undisclosed location in central Italy, was among more than a gigawatt of successful bids by battery storage operators and owners in a capacity market auction hosted by national grid operator Terna in early 2022.

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The auction, which was for delivery of projects to begin operation in 2024, has been credited with kickstarting the Italian market for grid-scale energy storage. Its biggest winner was utility Enel, which won more than 90% of contracts up for grabs.

Italy is set to become one of Europe’s most active markets, as profiled in a feature article for our quarterly journal PV Tech Power (Vol.35) earlier this year.

Terna has described energy storage as the “indispensable new lungs of our electricity system,” while in that article mentioned above Emanuele Taibi of developer Field Energy said the unexpectedly large number of contracts awarded by the grid operator in its Capacity Market Auction 2024 was made possible by impressive capex reductions in the cost of BESS.

The market had got into motion with an ancillary services tender, for fast reserve frequency regulation held in 2020, in which 250MW of contracts were awarded to BESS projects. However, it was the capacity market auction that came two years later that triggered commitments to deploying more storage by Terna, the Italian government and its regulators.

Enel, for example said in April that including its capacity market auction-winning projects, it had begun building a total of 1.6GW of energy storage facilities in the country.

Aurora Energy Research identified Italy as one of the five most attractive energy storage markets in Europe earlier this year, and deployments doubled in the first half of this year according to according to ANIE Rinnovabili, a national clean energy trade body.

Italy needs 71GWh of storage ‘to align with EU objectives’

Terna has since released modelling forecasting a need for as much as 8.875GW/71GWh of grid-scale storage by 2030, which would keep Italy aligned to European Union (EU) renewable energy goals under its revised ‘Fit for 55’ policies that would reduce greenhouse gas (GHG) emissions in the bloc by 55% by the end of this decade.

In addition, the Regulatory Authority for Energy, Networks and the Environment (Autorità di Regolazione per Energia Reti e Ambiente or ARERA) approved new rules this summer which will allow the transmission system operator (TSO) to run auctions for large-scale energy storage.

While a relatively small project within that context, the news of NHOA’s latest comes after the system integrator delivered 70MW of Fast Reserve Units and the company claimed the wins demonstrate that NHOA is capable of providing BESS projects that respond to Italy’s market signals and opportunities.

The new 39MWh system – output in MW was not disclosed – will be co-located with an existing combined cycle gas turbine (CCGT) plant and will be integrated into the thermal power plant’s controls system.  

“This award, in the context of the 2024 Capacity Market auctions, is an important signal and opens the doors for the future projects that Italy will need to put in view of the EU 2030 decarbonisation objectives,” NHOA Energy’s vice president Fabrizio Ciaccia said.

The news follows announcements of recently completed projects by the company in China and Peru. NHOA, headquartered in Turin, was formerly known as Engie EPS before it was acquired by Taiwan Cement Corporation (TCC) and rebranded in 2021. NHOA is targeting reaching 1.7GWh of cumulative energy storage deployments by 2025, a big leap from the 170GW or so it deployed during 2015 to 2021.

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