Greece has concluded its third storage auction with a notable drop in participation and a shift toward longer-duration technologies, which Our New Energy interprets as a direct signal for what is coming in Italy with the MACSE, the first call for bids scheduled for September 30.

“The competition has completely changed between auctions. From 3,200 MW offered in the first, it dropped to just 450 MW in the third,” said Laura Susta, Advisor at Our New Energy, in an interview with Strategic Energy Europe. While the allocated volumes also decreased (400 MW, 300 MW, and 200 MW respectively), the sharpest drop was in the volume of participation.

This evolution was also evident in technology. The first two Greek auctions focused on 2-hour storage systems, while the third was comprised exclusively of 4-hour projects. “It is certainly a strategic shift by both the government and the storage system owners,” Susta maintains.

Miguel Marroquín, Managing Director of the consulting firm, adds: “There is a clear tendency to prioritize larger batteries in terms of hours, while shorter-lasting batteries are allocated to other markets or activities.”

Italy: MACSE and a More Competitive Environment

Italy is preparing to implement the MACSE (Mechanism for Approval of Electric Storage Capacity), which will partially replicate the Greek model, but with its own specificities. In this regard, Our New Energy anticipates high participation and more challenging market conditions.

“In Italy, there will be a lot of competition. For some clients, we are already simulating the auction using game theory models,” Susta explains. Unlike Greece, in Italy, a multiplicity of bids per player is expected, which would allow for optimized participation strategies.

Furthermore, prices will be higher. “The price of electricity and land is higher. Terna estimates a reference cost of €43,000 per MWh/year, twice the price earned in Greece per MWh/year. Therefore, the awarded prices will likely be higher,” explains Marroquín.

Another key aspect will be technology. “Everyone expects the MACSE batteries to last four hours. In fact, in Italy, there’s a ‘corrective factor’ that favors this as a target,” Susta explains. Shorter batteries wouldn’t be competitive, which is already pushing the market toward that standard.

Size, Scale, and Geographic Segmentation

The scale will be a determining factor in the results of the MACSE. “Larger projects can offer prices that are up to 30% lower,” says Marroquín, who emphasizes that this auction is not just about installed capacity, but also energy and duration.

Regarding territorial segmentation, Italy will divide the auction into a national quota and seven geographic areas, which adds an additional strategic layer. “It will be interesting to see whether the most determining factor is the national or regional quota. There are areas like Sud with a lot of capacity, and others with large projects but no available grid space,” explains Susta.

Toward a New Market Model?

While the MACSE represents a transitional solution, Our New Energy questions the long-term sustainability of the scheme. “Hopefully, we can stop holding auctions and build a market that provides correct price signals,” says Marroquín. The alternative would be to promote broader adjustment markets, as is the case in Sweden, where there are up to eight different types.

Italy and Spain, on the other hand, face structural limitations. “There are no primary markets, and flexibility is limited. The risk is building patch-on-patch solutions, which ends up making the entire system more expensive,” he warns.

The sector is already facing distortions: “If you don’t win the first auction, your project could become unviable. Storage without incentives faces ever-increasing barriers,” Marroquín concludes, emphasizing that this nullifies competition.

Greece: A Double-Ended Auction

Our New Energy’s analysis not only focuses on the latest Greek auction round, but also examines all three public calls. In total, Greece has awarded nearly 1,000 MW of storage, although the incentive mechanisms could be phased out in the near future.

“The Greek government has understood that, with such a steep price curve, market revenues are sufficient to create a viable business case without the need for subsidies,” Susta emphasizes.

The consultancy warns, however, that the auction system creates “a two-speed market.” “Those who participated and won the first auctions are guaranteed a return for 10 or 15 years. Those who enter later will compete without incentives, with higher costs or lower returns,” Marroquín analyzes.

According to data from the Hellenic Regulatory Authority for Waste, Energy and Water (RAAEY), nine projects were selected in the third Greek auction, each with a capacity of 188.9 MW and 755.6 MWh, with an average award price of €52,589.1/MW/year.

However, when measured by price per MWh, the third auction is more efficient than the previous ones. “Although the price per MW appears higher, 4-hour batteries show significantly lower support per unit of energy delivered,” Susta notes. In fact, a nearly linear correlation is observed between prices and system lifespan.

The Greek experience serves as a preview for the Italian MACSE: fewer participants, larger batteries, and an urgency to win in the first round. For Our New Energy, the real challenge is to design a system that incentivizes investment without creating parallel markets or exclusively benefiting the big players.