Partner Rome
"MASE has approved the proposal for the regulation of the Electricity Storage Capacity Procurement Mechanism."
In December 2023, the European Commission confirmed the framework was compatible with EU plans for the development of new electricity storage capacity within its internal market. Macse thus enters its operational phase limited to the forward procurement of new capacity, firstly through an auction dedicated to lithium-ion batteries and electricity storage technology other than lithium-ion batteries and hydroelectric storage, which will take place in H1 2025.
The approved proposal does not yet include the methods and conditions for participation in the MASE hydroelectric storage, for which Terna will have to draw up a separate proposal to amend the relevant regulations and submit it to MASE by 31 March 2025.
The Macse Decree represents a fundamental step forward in Italy’s energy transition and decarbonisation. Aimed at improving the management of energy resources, the Macse Decree encourages the use of renewable sources and optimises the balance between electricity supply and demand.
Macse’s competition procedures
The framework approved by MASE defines the required participation procedures, mechanism functions, regulation of contracts and system of guarantees. The auction mechanism provided for by aims to “maximise the net value of transactions on the entire system”.
Operators will have to send Macse a request for admission, demonstrating that they meet specific subjective requirements. Once this has successfully demonstrated, operators will have access to the Macse Portal, allowing them to participate in all competition procedures.
To participate in competition procedures, meeting certain objective requirements is required. Such requirements vary whether the storage system (“SdS”):
- belongs to one of the ‘referenced technologies’ identified in art. 6.1 of the Macse regulation;
- does not belong to one of the ‘referenced technologies’ identified in art. 6.2 of the Macse regulation; or
- is in conversion – i.e., is the subject of an intervention carried out on an existing hydroelectric plant aimed at converting it into a pumped storage plant (art. 6.3 of the Macse regulation).
Key contacts
Counsel Milan
Associate Milan
Associate Rome
"The Macse Decree represents a fundamental step forward in Italy’s energy transition and decarbonisation."
Participating operators may submit only one offer for each qualified SdS. For each auction, Terna will select the bids through an algorithm system and will use the Macse Portal to inform each participant the following details on each SdS offered:
- the selected capacity;
- the maximum power selected;
- the selected minimum power; and
- its value by making specific technical information available.
Regulation of contracts and system of guarantees
Another fundamental aspect regulated by the Macse Decree is the contractual arrangements between the operators awarded the auctions and the storage system operators.
The contracts will provide the successful tenderer with:
- obligations concerning: (i) realisation; (ii) availability; and (iii) return;
- fees including: (i) fixed; (ii) variable; (iii) contribution fees; and (iv) for ancillary services; and
- penalties for (i) non-realisation; (ii) unavailability; and (iii) contract termination.
With reference to the guarantee system, Terna plays the role of central counterparty and manages the system, consisting of pre-auction and post-auction guarantees.
At least 40 days before the date of the relevant auction, participants must provide a pre-auction guarantee. The guarantee must be a non-interest-bearing security deposit, for an amount equal to the sum referred to in Art. 34 of the Macse regulation. Terna may enforce the pre-auction guarantee if the participant does not fulfil some of their obligations or if it is found that the declarations made or documentation provided are untrue.
For each contract, an assignee must provide or supplement one or more post-auction guarantee in the form of a non-interest-bearing security deposit or a bank guarantee for an amount equal to the sum referred to in Art. 38 of the Macse regulation. An assignee’s post-auction guarantees are considered for the purpose of covering obligations provided for in the contract. Terna has the right of enforcement if an assignee fails to fulfil its payment obligations.
For each contract, the assignee must pay Terna an amount determined on the basis of guidelines identified in Art. 42 of the Decree, as a contribution to the guarantee fund set up for MASE. The contributions paid by each assignee flow into the guarantee fund.
The use of the guarantee fund is subject to the enforcement of all post-auction guarantees provided by the assignee.
Key contacts
Partner Rome
Counsel Milan
Associate Milan
Associate Rome
