Household electricity bills remain high, yet on the wholesale market some operators can even be paid to consume energy. This is one of the paradoxes created by the growth of renewables: sun and wind produce when they can, not when the grid needs them, and in moments of oversupply prices can even turn negative.
This is why huge batteries, BESS (Battery Energy Storage Systems) are needed, able to absorb surplus energy and feed it back into the grid later. Their role is so strategic that it has triggered a genuine gold rush, with Italy in a leading position.
Batteries, 300 GW of connection requests in Italy
By the end of 2025, connection requests for high- and extra-high-voltage storage systems submitted to Terna had reached 300 GW. Yet only 56 GW had received the go-ahead, and just 6.8 GW were ready to start construction.
Storage systems already installed had 7.4 GW of power and 17.9 GWh of capacity. Terna estimates that by 2030 Italy will need around 72 GWh, a figure expected to rise further in scenarios for 2040.
The 300 GW requested therefore are not only projects about to enter into operation: they are also a huge advance booking on the future electricity system.
In her State of the Union address on 16 September, Ursula von der Leyen recalled that in 2025 Europe installed more than 80 GW of new renewable capacity, while a capacity six times greater is still waiting to be connected to the grid. “We must invest faster… speed up grid connections… develop storage”, she said.
Germany’s battery rush is even bigger
Germany shows the same dynamic in an even more extreme form. In 2025 alone, grid operators received 18,158 applications for large storage systems, amounting to 573.5 GW.
The connection offers issued covered 54.2 GW; plants actually in operation at medium voltage and above amounted to 3.6 GW.
The Bundesnetzagentur also warns that some of the applications are duplicates: the same developer can submit the same project at several points on the grid and only later decide where to build.
In practice, before the batteries themselves are bought, what is being traded are options.
When the banks arrive: storage turns into an asset class
The story of German company Kyon Energy shows how quickly financing in the sector has changed. In January 2024 TotalEnergies bought it from its three founders, paying 90 million euros up front plus additional earn-outs. Kyon had already developed 770 MW and had a firm pipeline of another 2 GW.
At the time, co-founder Philipp Merk explained that financing large batteries was still difficult: Kyon would initially build with its own capital and seek bank refinancing only once the system was in operation.
Two years on, the picture looks different. In 2026 TotalEnergies sold Allianz Global Investors a 50% stake in eleven Kyon projects, totalling 789 MW and 1,628 MWh; in July a project financing worth around 440 million euros, underwritten by ten financial institutions, was announced.
Structured tolling agreements, effectively leasing out battery capacity, secure a share of contracted revenues and make cash flows more predictable.
The real value can emerge before construction
This is the mechanism also described by Stefano Endrizzi, a partner at MergersCorp, who works on extraordinary finance deals, including in the renewable energy sector.
“How many players have the financial strength to build? Very few, perhaps one in fifty”, he notes. Many, however, can secure a plot of land and develop the project “entirely on paper”. Value is therefore created even before construction begins.
Large investment funds and energy, engineering and construction companies, EPC contractors, prefer to acquire authorised projects and move straight into the development phase: a practical way of buying time without getting lost in the labyrinth of permitting and bureaucracy.
Italy’s first battery auction attracts a wave of bids
Competition is already visible in Italy. At the first MACSE auction in September 2025, Terna awarded 10 GWh of capacity, all in lithium-ion batteries.
Bids were more than four times higher than the volume on offer and the weighted average price fell to 12,959 euros/MWh per year, compared with a reserve premium of 37,000 euros, a drop of around 65%.
Capital is meanwhile pouring in. In 2025 Modo Energy counted 82 BESS deals in Europe, up from 25 a year earlier, with a disclosed value of 8.6 billion euros. Reported debt rose from 1.4 to 6.1 billion; project finance accounts for half of all transactions.
The clampdown on “phantom projects”
The European Commission has now explicitly acknowledged the problem. In its grid connection guidelines of December 2025 it identifies speculative applications and projects that fail to progress as one of the causes of long queues.
It cites hoarding of grid capacity, multiple applications for the same project and even cases where a connection is blocked with the aim of later selling on the rights.
Among the countermeasures, it proposes criteria linked to project maturity, deadlines, penalties and financial deposits that can be forfeited if the investment does not go ahead.
Italy, new rules to tackle grid saturation
Italy has already begun to adjust course. The Bollette decree of February 2026 introduced a reform to tackle the “virtual saturation” of the grid: capacity will have to be definitively allocated to authorised projects, and some connections obtained by still-immature schemes may lapse.
The implementing decree from MASE was signed on 8 September; the final regulatory step from ARERA is still pending.
The paradox is that the clampdown comes after years in which Brussels and national governments have sought to speed up exactly those procedures which now also need to become more selective.
The RED III directive set shorter deadlines for many permits and provided fast-track lanes for renewables and storage attached to generating plants; in Italy the procedures for stand-alone BESS have also been simplified over time.
Energy projects: simplifying does not mean making everything simple
“It is an enormous amount of work”, says Endrizzi. “Even for just 4 or 5 megawatts we are talking about thousands of documents.”
Yet the outlay needed to develop a project remains only a fraction of what is required to build the plant itself, while an authorised project can acquire its own value and be sold on.
And here a second paradox emerges. To clear the queues, authorities can demand more substantial financial guarantees and evidence of maturity. But that makes it harder for small developers to hold a position for years, while utilities, funds and large groups have the capital needed.
The fight against speculation can therefore also foster market concentration.
The land rush for renewables, BESS and data centres
The financial race ultimately comes back down to earth. Solar, agrivoltaic, wind power and BESS are all competing for sites and grid connections, while data centres are also rapidly increasing potential demand on the system.
Italy’s CREA estimates the average value of agricultural land in 2024 at around 22,400 euros per hectare and highlights the impact of renewable installations on prices; in some cases it documents photovoltaic offers of about 60,000 euros per hectare.
According to Endrizzi’s experience, farmland in northern Italy that might be worth 15,000-25,000 euros per hectare can, once it becomes attractive for energy development, reach asking prices of around 90,000-100,000.
In the new energy market, the value of land no longer depends solely on what can be grown on it. It also depends on how much energy can flow past it and on the possibility of securing today a foothold in tomorrow’s electricity system.
The language of storage: key definitions
GW (gigawatt) – Measures power, namely how quickly a battery can absorb or release energy.
GWh (gigawatt-hour) – Measures capacity, namely how much energy a battery can store. A system rated at 1 GW that can deliver that power for four hours has a capacity of 4 GWh.
Arbitrage – The mechanism by which you charge a battery when electricity is cheap, or when the price turns negative, and then sell the energy when the price rises.
Merchant – Refers to revenues that are directly exposed to movements in the power market, without a fixed remuneration guaranteed by contract.
Tolling – An operator pays a fee to use battery capacity under contract. The owner thus secures a more predictable revenue component.
Pumped-storage hydropower – A form of storage that uses surplus electricity to pump water uphill from a lower to an upper reservoir. The water can then fall back through the turbines and generate new energy.