On 18th December 2024, Terna held the Italian Capacity Market (CM) auction for the 2026 delivery year, assigning 42.8 GW of derated capacity (CDP) as follows:
- 38.3 GW existing operational capacity
- 0.14 GW new authorized capacity (primarily in South, Sicily, and North zones)
- 4.4 GW foreign capacity (mainly from Northern borders).
The auction results mirrored those of 2025, with similar capacity proportions. However, the clearing price for new capacity 15-year contracts dropped from 67.5 €/kW in 2025 to 56.2 €/kW in 2026, despite a price cap of 86 €/kW. As for all previous Italian CM auctions so far, 2026 saw no zonal price decoupling in the auction clearing.
Key takeaways:
- Unawarded Capacity: Over 20 GW of CDP contributed to system adequacy and price clearing in 2026, but did not receive any CM contracts, primarily consisting of:
- Previously awarded new capacity
- Renewable generation
- Non-eligible flexible capacity (e.g., coal, reduced in 2026 compared to 2025 due to Italian phase-out plans in all the zones despite Sardinia).
- Existing Capacity Premiums: Existing capacity received 1-year contracts at the price cap for eligible CDP, rising from 33 €/kW (2022-2024) to 46 €/kW in 2026. Italian operators benefit from stacking CM revenues with high Clean Spark Spread-driven merchant revenues.
The next CM auction for the 2027 delivery year is scheduled for 26th February 2025, with the 2028 CM auction expected later in the second half of 2025 after the MACSE auction.
Timera Energy delivered a webinar on “MACSE strategy” – key Italian BESS investment case drivers & commercial strategy for MACSE & Capacity Market, which took place on Tuesday 12th November at 10AM CET (9AM GMT).
Click here for the recording of the webinar.
Click here for the webinar slides.
If you are interested in (1) accessing a sample copy of our Italian BESS Investment Report or (2) understanding how we are supporting clients in the Italian market, please contact Alessio Cunico (Senior Analyst) alessio.cunico@timera-energy.com or Steven Coppack (Power Director) steven.coppack@timera-energy.com.
