European Commission approves €17.7bn Italian energy storage state aid scheme

January 3, 2024

The European Commission has approved – under EU State aid rules – a €17.7 billion Italian scheme to support the construction and operation of a centralised electricity storage system.

The scheme will support the construction of electricity storage facilities with a joint capacity of more than 9 GW/71 GWh. It will run until 31 December 2033.

Under the scheme, the aid will take the form of annual payments covering investment and operating costs to electricity storage developers. “The beneficiaries will be selected through a competitive, transparent, and non-discriminatory bidding process, where electricity storage developers will compete based on offers relating to the lowest amount of aid requested per offered capacity volume,” an EU statement said.

The scheme will be open to all technologies meeting the performance requirements set by the Italian Transmission System Operator and approved by the Italian Energy Regulator. The list of eligible electricity storage technologies will be revised every two years to reflect technological developments. Currently, eligible technologies include electrochemical lithium-ion storage, as well as hydro pumped storage plants.

As part of the measure, a new “time-shifting trading platform” will be set-up. Through this platform, storage capacity will be pooled and offered to third parties in the form of standardised time-shifting products. The beneficiaries of the measure will be required to make available the storage assets on this platform. The TSO will then assign physical storage assets to execute the standard time-shifting contracts, optimising the use of available storage assets. This platform will enable renewable energy producers to use the storage assets supported by the measure to directly shift their electricity production from times of overgeneration to times of scarcity.