ARERA consults on final orientations for dispatch service, simplified energy pricing and DSO storage in Italy's non-interconnected island systems (341/2026/R/eel)

ARERA published consultation document 341/2026/R/eel setting out 'final orientations' for delivering the dispatch service in isolated electrical systems (mainly non-interconnected minor islands), confirming a simplified conventional-imbalance-price valorization model for injected/withdrawn energy, defining basic and extraordinary island ancillary services plus a pilot for additional ancillary services, addressing DSO ownership/operation of storage under an Article 36 Directive 2019/944 derogation, and setting specific supply conditions for vertically-integrated 'imprese elettriche minori'. A draft consolidated text (TIDSI) is annexed; stakeholders can comment until 9 November 2026.

This establishes for the first time a comprehensive, uniform regulatory architecture for dispatch, balancing/imbalance pricing and ancillary services in Italy's isolated island grids, implementing new primary legislation (art. 1-duodecies of DL 63/2026 as converted) that assigns dispatching responsibility to local DSOs, allows DSO ownership of storage, and locks in supplier conditions for island incumbents — all subject to European Commission approval of derogations from Directive 2019/944 (free supplier choice, market-based pricing, DSO storage ban).

Design-wise this is a hybrid balancing/ancillary-services framework rather than a traditional wholesale market redesign: isolated islands are explicitly carved out of GME day-ahead/intraday/forward trading, with energy valorized via conventional imbalance prices referenced to the adjacent bidding zone's zonal price and GME's PUN Index, aggregated into Virtual Isolated Units (UIV) by BRP, energy type and zone. This reduces BRP compliance burden (no mandatory nomination) while preserving some wholesale-price linkage via zonal/PUN reference prices, limiting basis risk but not eliminating cross-subsidization via tariff integration mechanisms for 'essential' plants. On the balancing/ancillary side, ARERA codifies a three-tier service stack (base frequency/voltage regulation from essential plants, an extraordinary downward modulation service mirroring Terna's mainland mechanism, and a pilot procurement for 'further' ancillary services under deliberazione 352/2021/R/eel), which formalizes curtailment compensation methodology (zonal quarter-hourly price) for renewable curtailment — relevant as non-programmable RES penetration rises on island grids with sharp seasonal peak/summer demand profiles. The DSO storage provision is legally contingent: it anticipates, but does not yet implement, a derogation from Directive 2019/944 Art. 36(1) (which bars DSOs from owning/operating storage) pending EU Commission authorization; in the interim, DSOs may only deploy storage as 'fully integrated network components' under existing Italian law (art. 38bis of d.lgs. 93/11), while vertically-integrated 'imprese elettriche minori' can already build storage acting as producers under unbundling rules. The retail-supply carve-out for 'imprese elettriche minori' customers (continuing without free supplier choice, using maggior tutela/tutele graduali pricing rather than more costly salvaguardia conditions) is similarly conditional on EU approval of an Art. 4/5 Directive 2019/944 derogation; if that derogation is refused, ARERA states the general simplified model would need to be extended to those islands too. This conditionality (two separate EU derogation approvals pending) creates material regulatory uncertainty around final implementation timing and scope, and the eventual framework's applicability to all islands uniformly versus a bifurcated regime depends on Brussels' decisions, not solely on ARERA's domestic process.

Article 1-duodecies of decreto-legge 63/2026 (converted with amendments by legge 113/2026), amending article 11 of decreto legislativo 210/21; Directive (EU) 2019/944 (Articles 4, 5, 36(1)-(2), 66); deliberazione ARG/elt 89/09; deliberazione 78/2019/R/eel; deliberazione 352/2021/R/eel; prior consultation documents 322/2019/R/eel and 685/2022/R/eel

Deadline for stakeholder observations on consultation document 341/2026/R/eel · 9 Nov 2026

Primary sources