• Axpo has signed a 10-year tolling agreement covering Zelestra’s planned 207 MW battery storage project in northern Italy.
• The facility will provide about 830 MWh of storage capacity, supporting renewable integration and grid flexibility.
• Construction is expected to begin in 2027, with commercial operations scheduled for 2028.

Axpo has signed a long-term agreement with renewable energy developer Zelestra for a 207 MW battery energy storage project in northeastern Italy.

The 10-year physical tolling agreement will support the construction and operation of a utility-scale battery system with approximately 830 MWh of storage capacity. The project will be built, owned and operated by Zelestra.

Located in Friuli-Venezia Giulia, the facility will serve one of Italy’s most industrialised regions. It will help the electricity system absorb growing volumes of renewable power while providing additional flexibility and stability.

Construction is expected to start in 2027. Commercial operations are scheduled for 2028.

Long-Term Contract Supports Project Financing

Under the agreement, Axpo will optimise the battery’s operation across Italy’s electricity and grid services markets.

The company will manage how and when the system charges and discharges. This will allow the project to respond to changes in power demand, renewable generation and market prices.

The contract also gives Zelestra greater long-term revenue visibility. That commercial certainty can help reduce investment risk and support financing for large-scale storage infrastructure.

Battery tolling agreements are becoming an important tool for energy developers. They divide project ownership from market optimisation and provide more predictable returns than relying solely on volatile wholesale prices.

For Axpo, the agreement expands its role in Italy beyond conventional power trading and renewable energy services. It is the company’s first battery storage agreement in the country.

Axpo Italia’s Head of Origination and Structured Products, Simone Rodolfi, said: “Flexible generation is a cornerstone of Italy’s energy transition. As renewable energy capacity grows, solutions like battery energy storage systems are essential to ensure grid stability and maximise the value of clean power generation. This is our first BESS agreement in Italy and we’re proud to partner with Zelestra. Our landmark partnership demonstrates Axpo’s commitment to innovative energy solutions and strengthens our position in the Italian market as a trusted partner for origination and risk management. The agreement has the potential to open new opportunities in the rapidly growing storage sector.”

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Storage Capacity Expands Across Italy

Italy’s electricity market is undergoing a structural shift as solar and wind generation expand. That growth creates a greater need for technologies that can balance supply and demand throughout the day.

Battery systems can store surplus renewable electricity when generation is high. They can then release power when demand rises or renewable output falls.

This flexibility can reduce renewable curtailment, support grid reliability and limit reliance on fossil fuel generation during periods of peak demand.

Zelestra said the Friuli-Venezia Giulia project has reached an advanced stage of development. The company now holds 970 MW of authorised battery storage capacity across Italy.

Zelestra Italy CEO Eliano Russo added: “Our agreement with Axpo shows how long-term partnerships with leading energy market participants can accelerate investment in the flexible infrastructure that the country needs. Our first BESS project in Friuli-Venezia Giulia combines a strategic location, advanced stage of development, and a robust commercial structure. This project and the agreement with Axpo make Zelestra the second-largest owner of authorised battery storage capacity in Italy – at 970 MW – reinforcing Zelestra’s market leadership in this growing sector.”

Grid Flexibility Becomes a Strategic Priority

The agreement reflects a wider move toward contracted business models in European battery storage.

Developers need stable revenues to secure capital for projects with high upfront costs. Energy traders and utilities, meanwhile, want access to flexible assets that can operate across several markets.

These arrangements can support both objectives. They also give investors clearer visibility over project cash flows and exposure to power market risk.

For corporate leaders and infrastructure investors, Italy’s storage market offers both opportunity and complexity. Project value will depend on permitting, grid access, market design and the ability to combine multiple revenue streams.

The Axpo-Zelestra project also highlights the growing connection between renewable investment and power system resilience. Adding wind and solar capacity alone will not deliver a reliable low-carbon electricity system.

Storage, grid upgrades and flexible demand will be equally important. As Italy advances its energy transition, long-term commercial agreements could determine how quickly those assets move from authorised capacity to operational infrastructure.