Italy’s Regulatory Authority for Energy, Networks and Environment (ARERA) has approved the second set of Technical Operating Provisions (DTF 2) submitted by grid operator Terna for the capacity market auction covering delivery in 2028. In Resolution 370/2026/R/eel, dated Oct. 14, the regulator confirmed that the document complies with the applicable requirements, limiting its approval to the 2028 auction.
Terna submitted the revised provisions on Sept. 18 in response to a ministerial decree dated Aug. 6, 2026. The decree had approved an earlier version of the DTF 2 rules for 2028, which ARERA had reviewed under Resolution 264/2026/R/eel, but instructed Terna to reassess battery derating factors before the auction if authorized or pending storage capacity had increased from the figures used in June.
Terna recalculated derating factors for electrochemical storage using updated estimates of expected deployment. The calculations include capacity that has already received authorization and an estimate of additional capacity likely to be authorized before the auction, excluding capacity expected to be awarded in the MACSE storage procurement auction for delivery in 2029.
According to ARERA’s resolution, the updated calculations result in higher derating factors. All other things being equal, this will reduce the remuneration available to new battery projects awarded contracts in the capacity market.
The revised provisions also change the limits on electricity exchanges between foreign virtual areas and domestic market areas. Terna proposed changing the exchange limit between the foreign North virtual area and Italy’s North market area, partly to bring it into line with imports recorded during periods of greatest stress on the electricity system in 2025.
The Aug. 6 decree also approved a change to the capacity market rules allowing successful bidders for new capacity to postpone the start of their delivery period until December of the first delivery year. They must notify Terna of the postponement by April 30 of the preceding year. Within the following 60 days, Terna must hold an adjustment auction that accounts for the affected capacity.
Terna submitted the first quantitative parameters for the 2028 auction in November 2025. In December, Italy’s Ministry of Environment and Energy Security (MASE) requested further analysis of the derating-factor calculations to ensure fair competition between technologies.
In a policy directive dated Jan. 22, 2026, the ministry subsequently called for revisions to the capacity market rules aimed at renewing Italy’s existing thermal power fleet, including through plant refurbishment, and providing greater flexibility in contract execution. Terna then held a consultation on Feb. 16 and submitted its proposal on April 3, accompanied by a methodological note on derating factors for electrochemical storage and solar photovoltaics.
The auction timetable remains undecided. In the preamble to its Aug. 6 decree, the ministry asked Terna to assess whether to hold the auction for 2028 delivery after the MACSE auction for 2029 delivery, scheduled for November. It also asked Terna to schedule future capacity market auctions sufficiently far ahead of their delivery years and in line with the findings of the 2025 adequacy report.
The most recent capacity market auction, covering delivery in 2027, took place in February 2025.
From pv magazine Italia
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