ARERA Approves Revised Technical Operating Provisions (DTF 2) for Italy's 2028 Capacity Market Delivery Year, Updating Storage De-Rating and Cross-Border Exchange Limits

ARERA Resolution 370/2026/R/eel (14 October 2026) positively verified the conformity of Terna's second proposal of Technical Operating Provisions (DTF 2 2028) for the capacity market auction covering the 2028 delivery year, as revised pursuant to Ministerial Decree of 6 August 2026. The approved proposal updates de-rating coefficients for electrochemical storage systems (reflecting increased authorized/expected storage capacity net of an estimate of capacity selected in the November 2026 Macse 2029 storage capacity auction) and revises the exchange limit between the North foreign virtual area and the North national area to reflect 2025 import levels during critical system periods.

These technical parameters directly determine the supply curve, remuneration levels for new electrochemical storage, and cross-border capacity accounting used in the upcoming 2028 delivery year capacity auction. Higher de-rating coefficients for storage reduce the probabilistic capacity credited to new battery assets, lowering their potential remuneration via the capacity market, while revised cross-border exchange limits affect how foreign capacity can contribute to Italian system adequacy.

This decision sits at the intersection of adequacy mechanism design and the rapid build-out of electrochemical storage in Italy. By tying de-rating coefficients to updated authorization data and netting out expected Macse 2029 storage auction awards, ARERA/Terna are attempting to avoid double-counting storage adequacy contributions across two parallel capacity mechanisms (the general Capacity Market and the dedicated Macse storage mechanism). The ceteris paribus increase in de-rating for new electrochemical storage signals a tightening of capacity credit assumptions as storage penetration rises, which could marginally dampen investment signals from the Capacity Market for batteries while the Macse mechanism becomes the primary storage-specific revenue stream. The revision of the North virtual area exchange limit based on actual 2025 import behavior during stress periods reflects an evidence-based recalibration of cross-zonal capacity value, relevant for interconnector-based capacity providers and neighboring market coupling arrangements. The explicit sequencing requirement—running the Macse 2029 auction before the 2028 Capacity Market auction—indicates increasing institutional attention to inter-mechanism coordination as Italy operates multiple adequacy tools concurrently.

Legislative Decree 379/03; ARERA Resolution ARG/elt 98/11; EU Regulations 2019/943 and 2019/941; Ministerial Decree 6 August 2026; ARERA Resolution 264/2026/R/eel; ARERA Resolution 370/2026/R/eel

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