​Terna is seeking feedback on new rules for the Italy capacity auction for 2028 delivery. The proposal tightens de-rating coefficients for all battery durations, driven by forecasts of 4 GW of additional batteries in the Nord zone and 64 GW of solar across the country. The consultation closes on March 9, 2026.

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Key takeaways

• Terna assumes 4 GW of new battery capacity in the Nord zone, far above currently approved levels. This bold assumption cuts qualified capacity for all battery durations by 20-25%.
• Italy currently offers the most generous battery de-rating in Europe. The proposed changes would put Italian batteries below Belgium and closer to GB at 4 hours.
• Lower de-rating reduces the total qualified volume of the existing fleet, increasing the supply-demand gap and supporting higher clearing prices. However, by rule, non-participating renewables and batteries enter the supply curve at 0 €/MW-year, and projected growth in solar (64 GW, up from 43.5 GW) and BESS shifts the curve right, absorbing much of that space.
• A new bidding floor (Art. 24.2b) requires existing operators to offer their full capacity from the first session, compressing auction strategy along with the 4% price-step rule (Art. 24.9).

The proposed capacity market reform reduces battery qualification across all durations

Italy's de-rating coefficients determine how much of a battery's nameplate power counts as firm capacity. Currently, a 4-hour system qualifies at 67% of nameplate.

Under the proposal, this drops to 53%, so a 100 MW project would contract 53 MW instead of 67 MW. Shorter durations see even sharper cuts, with 1-hour batteries dropping from 24% to 18% and 8-hour batteries from 90% to 69%.

This reduction reflects saturation risk. As the battery fleet expands, Terna expects batteries to discharge at the same time during stress events, so each extra MW contributes less to system reliability.

These coefficients apply specifically to the 2028 delivery auction and will be recalculated for future auctions as the fleet changes.

Italy's proposed de-rating would put batteries below most European capacity markets

Currently, Italy leads Europe for BESS de-rating.

But the proposal changes that: at 53%, a 4-hour battery would fall below Belgium, and the gap with GB widens for longer durations.

De-rating methods vary widely across markets, but overall, Italy is shifting from the top of the European range toward the middle.

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The capacity market supply curve shifts twice: less qualified capacity, more zero-price bids

​The de-rating cut has two effects. Each battery qualifies for fewer MW, and the total qualified capacity of the existing fleet also shrinks. If Terna keeps the same adequacy target, the supply-demand gap widens, creating more auction space for new entrants and likely raising clearing prices.