Modo Energy attended the KEY Energy Transition Expo in Rimini (4-6 March). Developers, investors, and offtakers all pointed to the same constraint: regulatory uncertainty is the main barrier to Italian BESS investment. Three themes stood out:

1. The Decreto Bollette and its implications for wholesale price spreads
2. The growing number of stranded MACSE assets searching for tolling agreements
3. The outlook for future MACSE rounds, where rising capex might raise bids but not returns

1. Decreto Bollette threatens to compress spreads

The Decreto Bollette entered into force on 21 February 2026 as a decree-law. The Italian Parliament has 60 days to convert it into permanent legislation.

The headline measure reimburses gas-fired generators for EU ETS carbon costs. This component requires European Commission approval under state aid rules and would not take effect until 1 January 2027. Among BESS players, the uncertainty around implementation and its consequences is a major talking point.

​At current ETS prices of 70 EUR/tonne, carbon costs represent 20 to 30% of a gas plant's spot-market bid, depending on thermal efficiency. Removing that cost from the bid compresses peak prices more than off-peak, narrowing the daily spread that batteries rely on.

Peak prices are typically set by less-efficient gas peakers, which incur a higher ETS cost per MWh. Off-peak prices are more often set by renewables or efficient CCGTs, where the ETS component is smaller or zero.

The effect is stronger in summer, when solar often sets midday prices with no ETS cost embedded and only peak hours are affected. In winter, compression is spread more evenly but still weighted towards peaks.

​The Commission is more likely to reshape the mechanism than to fully reverse it, and until a decision is reached, the uncertainty alone is enough to slow investment.

2. Stranded MACSE assets are looking for tolls, but supply is limited

Multiple developers at KEY are now holding BESS assets that did not secure MACSE contracts and are searching for alternative routes to market. Most are targeting tolling agreements, but in the south, where these assets sit, demand for tolls far exceeds supply.

In the north, offtakers are signing tolls despite tighter spreads. In the south, where spreads look wider on paper, few will commit. The risk that large volumes of MACSE-contracted capacity come online in the same zones outweighs the current market advantage.

Some developers are structuring hybrid deals with partial merchant exposure to drive returns above what a pure toll offers. In a crowded market, offtakers are filtering on track record.

Developers who factored in an alternative offtake solution during development, designing assets not purely optimised for MACSE, are better positioned to pivot. Though notably, building in that flexibility can make it harder to compete in the auction itself.

3. MACSE is still competitive, and rising capex does not change that

Lithium carbonate prices have partially recovered from their 2023 trough, feeding through to higher BESS capex. This is pushing up the headline price that developers need to bid in MACSE auctions.

However, rising input costs do not translate into better returns. The competitive dynamics of MACSE mean that higher capex simply raises the floor price while compressing margins further. Developers are bidding what they need to, not what they want to.

For investors evaluating Italian BESS, the takeaway is that MACSE provides revenue certainty but not outsized returns. The real question is whether the merchant and tolling alternatives offer anything better, and based on conversations at KEY, the answer is not straightforward.