The Italian renewables market is entering a more selective phase. After years in which pipeline size was the primary driver of growth, competitive advantage is increasingly shifting toward execution capabilities, project profitability, and long-term sustainability.

By the end of 2025, grid connection requests submitted to the national transmission system for new renewable energy projects with an accepted Minimum General Technical Solution (STMG) had reached approximately 329 GW, across more than 5,900 applications. This figure is particularly significant when compared with the roughly 57 GW of solar and wind capacity currently installed in Italy and the approximately 7.1 GW of new solar and wind capacity that became operational during the same year.

The gap between capacity under development and capacity actually delivered highlights one of the key dynamics reshaping the sector. In a market characterized by an abundant project pipeline, value no longer lies solely in the number of megawatts within a pipeline, but increasingly in the ability to secure permits, obtain grid access, attract financing, and ultimately bring projects into operation.

A More Selective Market

In this environment, the secondary market is playing an increasingly important role. Developers are accelerating asset rotation strategies and divesting projects to finance the development and construction of their portfolios, while investors are applying greater scrutiny to development-related risks.

As a result, valuations are becoming increasingly polarized. Projects that are genuinely ready for construction benefit from a growing premium, while pipelines still exposed to permitting, grid connection, or route-to-market uncertainties face mounting pressure on value.

Operational assets supported by incentive schemes or long-term contracts continue to attract strong interest from financial investors, thanks to the greater predictability of their cash flows.

The Factors Redefining Competitive Advantage

Four key trends are shaping investment strategies for both industrial and financial investors and are expected to influence the market’s next phase of consolidation:

• Consolidation and Industrial Integration. Utilities and large Independent Power Producers (IPPs) can benefit from a significant competitive advantage by integrating generation, trading, retail, balancing, and energy management activities within diversified portfolios. This approach enhances risk management capabilities, particularly in a market increasingly exposed to competitive support mechanisms for renewable generation and energy storage.
• Locational Risk and Grid Infrastructure. Asset location is becoming an increasingly important factor in investment decisions. The quality of solar and wind resources must be assessed alongside captured power prices, balancing costs, zonal demand dynamics, and planned investments aimed at strengthening transmission infrastructure and grid capacity.
• The Rise of Specialist Platforms. Investor interest is growing in industrial platforms capable of operating across multiple segments of the value chain. Compared with the acquisition of individual projects, these platforms combine development, EPC, O&M, repowering, and energy management capabilities, creating value opportunities throughout the entire asset lifecycle.
• Energy Storage Systems. Battery Energy Storage Systems (BESS) are emerging as one of the most significant investment themes in Italy. The first MACSE auction awarded 10 GWh of capacity, with bids exceeding demand by more than four times and clearing prices significantly below the reserve premium. These results may accelerate pipeline consolidation, particularly among developers whose valuation expectations were largely driven by access to the regulated support scheme.

The New Phase of the Energy Transition

The new phase of the market will require more than simply securing access to new renewable projects. Success will increasingly depend on the ability to optimize operations and route-to-market strategies throughout the entire lifecycle of renewable assets.

Scale will remain an important factor, but it may no longer be sufficient to guarantee a competitive advantage. Permitting, grid access, construction capabilities, operations and maintenance, and repowering activities will become increasingly critical in transforming a project pipeline into long-term industrial value.

The next phase of the renewables market is likely to reward less those with the largest pipelines and increasingly those that control the critical success factors enabling projects to reach commercial operation and maximize performance through integrated lifecycle management.

Vittorio Robello
Director | Energy, Utilities and Resources, Strategy& Italy