The first auction of the Energy Services Capacity Storage Mechanism (MACSE) in Italy marked a European milestone: 10 GWh awarded, prices well below expectations and a clear dominance of the major utilities. For Laura Susta, advisor at Our New Energy, the most interesting aspect is not the results themselves, but how they will impact the immediate market for private contracts.

Speaking to Strategic Energy Europe, the consultant underlined that the market expected prices in the range of €21,000–22,000/MWh-year, but the strong oversubscription — four times more projects than available capacity — pushed the figures down to below €13,000/MWh-year. This reinforced the impression of a hyper-competitive environment, where only developers with solid backing or diversified strategies could survive.

Added to this is the concentration of awards: 70% of the projects went to ENEL and ENI, which applied what Susta calls a “portfolio effect”. By diversifying risks across multiple business lines and energy segments, these companies were able to bid lower than independent developers. For smaller players, this raises doubts about whether auctions are truly an opportunity or simply another space where major utilities consolidate their advantage.

Another key factor was the duration of the batteries. Although the auction was designed for 4 hours, most of the winning projects offered between 6 and 7 hours of storage. According to Susta, “the penalty coefficients designed to balance long-duration costs did not adequately reflect the real CAPEX gap.”

As a result, longer-duration systems became more competitive, altering the underlying economics of the auction and signalling that Italy may be moving towards long-duration energy storage (LDES) as a new standard.

But the major question now shifts to the immediate future: what will happen in the free market for PPAs, tolling and merchant projects? Susta argues that it is not yet clear whether these contracts will absorb the signal of such low MACSE prices or maintain higher values that continue to guarantee the viability of independent projects.

She points out that tolling agreements and hybrid PPAs could become essential tools for reducing risks and balancing exposure, but much will depend on whether the MACSE reference becomes the benchmark across the market.

“Many smaller developers could be pushed out if the market replicates those prices,” she warns, although she also emphasises that it is still too early and that utilities may choose not to transfer this reference into their contracts.

The impact is not limited to Italy. For the Our New Energy advisor, the auction will become a case study for the rest of Europe. Regulators in countries such as Spain, France and Germany are watching closely.

The Italian model could be adopted elsewhere as an effective way to secure capacity at low cost, but the risk is that it sets unsustainably low expectations for investors.

Financial institutions could hesitate to support merchant or hybrid projects if they regard €13,000/MWh-year as the new benchmark, weakening private sector appetite.

The precedent of Greece illustrates this dynamic. In its early auctions, prices varied significantly, but over time they became more concentrated and fell sharply, consolidating around lower values that redefined the economics of new projects.

Italy could follow a similar trajectory, with subsequent MACSE rounds reinforcing lower prices and pushing independents further towards merchant exposure.

The Italian MACSE achieved its immediate goal of guaranteeing capacity at low prices, but it opened up a much broader debate: the true litmus test will be the free market — whether it remains attractive for independents through differentiated PPAs, tolling agreements and merchant strategies, or whether the precedent set by the auction completely redefines the profitability of storage in Europe. For Susta, Italy is not just a milestone: it is a laboratory whose outcomes could shape the next chapter of the European energy transition.