Italy-specific modelling considerations for power markets and battery revenues
Italy is a zonal market with distinct price formation across its bidding zones, deep solar-driven day-night spreads in the South and on the islands, and a dedicated storage capacity mechanism (MACSE). These features require modelling approaches specific to the Italian system.
Market Structure
Italy is split into seven bidding zones, each with its own price:
| Zone | Code | Area |
|---|---|---|
| North | ITN1 | Northern Italy (largest demand centre) |
| Centre-North | ITCN | Central-northern Italy |
| Centre-South | ITCS | Central-southern Italy |
| South | ITS1 | Southern mainland |
| Calabria | ITCA | Calabria |
| Sicily | ITSI | Sicily |
| Sardinia | ITSA | Sardinia |
Solar penetration is highest in the South and on the islands, which are also more constrained on interconnection. This produces the widest day-ahead spreads — and the strongest battery arbitrage signal — in the southern zones, while the North holds the largest absolute demand and net-load swing.