How Sonnedix secured capacity in Italy’s ‘crucial’ FER X auction

Volpe describes this auction as “crucial” for the Italian solar sector, and says that it has been an integral part of Sonnedix’s plans for its Italian portfolio.

“There was [almost] 8GW of awarded capacity, and we took close to 8-9%,” says Volpe, whose company has a development pipeline of around 1.4GW, alongside its 1GW of operational capacity in Italy. “We were extremely successful.”

Volpe is not the only industry leader to praise the Italian auction system—earlier this month, Encavis’ Jan-Philip Kock told us that Italy is “definitely” the most attractive European country for new solar PV investments—and this comes as many European governments look to national auctions as a way to facilitate PV deployments within their borders.

Earlier this year, SolarPower Europe published a report into the shift away from corporate power purchase agreements (PPAs), and towards government auctions, as a key procurement tool in European solar, and PV Tech Premium has already heard from R.Power’s Michał Swół about the role of auctions in the German market.

Today, we hear from Volpe about Sonnedix’s work in Italy, how it achieved such successes in the FER X auction and how route-to-market options in Italian renewable energy could change in the future.

Italy’s ‘crucial’ auctions

“For us, FER X and the MACSE schemes are crucial,” says Volpe, referring to both the FER X solar PV auction and the Meccanismo di Approvvigionamento di Capacità di Stoccaggio Elettrico (MACSE) auction, which was completed last October and saw 10GWh of battery energy storage systems (BESS) receive government contracts.

“Our mandate was always to secure 20-year contracted revenue,” he adds, highlighting the importance of the length of contracts offered by the government as part of the FER X auction. “We were very focused on arriving prepared with the right projects.

This long-term security is often pointed to as an advantage that government contracts have over corporate PPAs, particularly in Europe at present where power prices have fluctuated considerably in recent months, introducing a degree of uncertainty to the corporate offtake space. Earlier this month, Pexapark estimated that the conflict in the Middle East could drive solar PPA prices in Europe up by as much as 35%, highlighting how this could be a particularly risky time for developers looking to sign corporate offtake deals.

“Duration is one of the key factors,” explains Volpe. “If we have a 20-year contract for difference (CfD) with the GSC (Gestore dei servizi energetici), we should have a similar PPA for 15 [years]. Duration is even valuable [in a way that is] similar to the price.”

However, while macroeconomic conditions can make government contracts more attractive for developers, that itself is no guarantee that those developers will be successful in these auctions.

When asked about Sonnedix’s successes in Italy, Volpe says that the company aimed to build projects in the south of the country, where there are historically lower power prices and less electricity demand than in the north; figures from TSO Terna show that electricity demand in the south fell by 0.7% in 2025, while electricity demand in the north increased last year.

“We were focused on Sicily,” he explains, saying that in the south “the FER X becomes the preferred way of monetising our energy, and in general, it’s the preferred scheme.”

“Italy is divided,” he continues. “In the north, where the demand is, we have an attractive corporate PPA [space], even giving premium prices for the zones where you are producing. But this changes when you go to the south, where there is massive potential production, but not so many customers there.”

Ultimately, being able to choose between working with the FER X auction, and corporate PPAs, depending on the location of the potential project, has been an important element of flexibility for Italian developers, where there is considerable regional variation in the energy system.

“[Our] Sicily development was very linked to the auction. Like us, others were developing there, so it was crucial to have a route to market [that was] very defined,” says Volpe. “Because of the offer on the project, there was an imbalance in the demand for a PPA, so a PPA was not the correct instrument. It was much better to have a government one … compared to a contracted PPA.”

Auctions for solar, auctions for storage

Volpe goes on to describe how the government’s support for the BESS sector, in addition to the solar industry, has become a “very important” part of facilitating new renewable energy deployments in Italy.

“MACSE is also a very important way of monetising our energy for BESS,” he explains. “We didn’t participate in the first auction, because we wanted to wait and understand. In fact, there was tough competition—the strike price was very low—and we’re going to participate in the next one, with not less than 300MW.”

This combination of auctions, with different designs for different technology types, is an important level of nuance. According to SolarPower Europe, 80% of all the renewable energy capacity that was awarded through government auctions in 2025 came through technology-specific auctions. This been a positive development for solar and wind electricity generation specifically, as the very low levelised cost of electricity (LCOE) of solar means that solar had started to replace wind in non-technology-specific auctions.

Antonio Arruebo, a senior market analyst at SolarPower Europe, told PV Tech Premium last month that that “we need auction rounds that are tailored to the specific needs of each technology,” and Volpe argus that this is true for BESS, too.

“Italy is in the right direction,” Volpe says. “For a supporting scheme for the PV, [there is] FER X. For the BESS, it’s MACSE and the capacity market.

“Everything is [designed] with investment into the grids,” he adds, saying that the auctions are designed as to be complimentary between solar and BESS projects and the broader capabilities and needs of the grid infrastructure.

“Terna is a top TSO in Europe, and they are investing massively into reinforcing the grids—DC and high voltage—and this is so nice, to have the framework and the BESS deployment,” Volpe explains. “We also already have a good capacity of BESS operational—5-6GW—and we are not like Spain where there is an overgeneration of PV, no BESS and the grid has to catch up.”

Open letter calls for more predictability in auctions

Perhaps a limitation, then, of Italy’s approach is that the sheer volume of auctions available, and market mechanisms on offer for developers, could create confusion as to what is the best course of action for a developer. Volpe, however, argues that the upcoming FER Z auction—the first to allow offers to be made for multiple technology types at a single project—could help streamline the system while ensuring the auction can facilitate the needs of different technologies.

“We are going to have a hybrid supporting scheme—the FER Z—and in that case we’re going to bid, proposing an energy profile that will be a combination of solar plus BESS,” he explains. “It’s a bit vague in terms of the commitment date, but the guideline is correct.”

He also calls on the government to increase the “level of predictability” for its auctions, not in terms of the power prices on offer, but simply the time frames and deadlines for which developers will have to work around. Sonnedix was one of several signatories—including fellow IPPs Encavis, Zelestra and Recurrent Energy—of an open letter urging the government to do exactly this in its upcoming auctions.

“We have started in a good way—we had the first FER X and MACSE and capacity auction last year—but still we do not have the date for the next FER X auction, MACSE and the capacity market. The framework is appreciated and goes in the right direction, but we need to have more predictability in terms of scale, and this needs to have a clear definition of the next auction, in terms of date,” Volpe says.

“That’s what the letter was saying, to increase this level of predictability, especially in these supporting schemes.”

When asked about the future of the Italian energy sector, Volpe argues that there will continue to be a place for both government auctions and corporate PPAs, particularly considering the disparity between the north and south in terms of electricity demand, local generation and power prices.

“I don’t see that the PPA will be abandoned—it depends on the conditions—but I see easy-to-source PPAs in the north of Italy where there is a lot of demand and high energy bills, a little bit more than in Spain where the solar capture prices are already very cheap, so there are more producers than customers,” he says.

He expects the same to be true of Europe as a whole, where different markets mechanisms, and indeed different renewable energy technologies, will be more or less appropriate in different countries.

“In some markets, where the price is so cheap, and there is a need to grow that sector, there will be a need for a supporting scheme,” he explains. “So I do suspect that the certainty of a CfD would be a nice supporting scheme to really [allow] the development of renewables and grow energy security in Europe.”