Swiss energy company Axpo and independent power producer Zelestra have entered into a ten-year tolling agreement covering a 207 MW/830 MWh battery energy storage system project in Italy's Friuli-Venezia Giulia region, marking a significant milestone for grid-scale storage in the country.

Deal Structure and Scope

The agreement is structured as a long-term tolling arrangement, granting Axpo operational control over the project's capacity in exchange for providing revenue certainty to Zelestra over the decade-long contract term. At 207 MW and 830 MWh, the project represents a substantial addition to Italy's battery storage landscape. The Friuli-Venezia Giulia site sits in the northeastern corner of the country, a region that has drawn growing interest from energy developers given its grid connectivity and proximity to key European transmission corridors.

Italy's Storage Market Takes Shape

The project holds particular significance for the Italian market. Should it reach full authorization and development, it would position Zelestra as Italy's second-largest holder of authorized battery storage capacity in the country — a notable leap for a developer still establishing its Italian portfolio. The deal also represents Axpo's continued push into the Italian storage sector, reinforcing the Swiss firm's role as a commercial offtaker willing to underwrite long-duration contracts for large-scale infrastructure.

Italy has been working to expand its flexible generation and storage capacity as the share of variable renewables on its grid increases. Projects of this scale are seen as important tools for managing frequency and balancing services across the national system, and long-term tolling structures like the one Axpo and Zelestra have agreed provide a commercially viable pathway for developers to finance construction without relying solely on merchant market revenues.

Zelestra's Broader July Activity

The Axpo agreement is not the only deal Zelestra has completed in recent weeks. According to one source report, this transaction represents the company's second commercial agreement finalized in July alone, pointing to an active period of contract execution for the IPP. The back-to-back signings suggest Zelestra is accelerating efforts to monetize its development pipeline and lock in long-term counterparties as the European storage market matures.

The Italian project is also notable as Zelestra's first battery energy storage development in the country, indicating the company is expanding its geographic footprint beyond markets where it has previously been active. Establishing an anchor agreement with a counterparty of Axpo's scale for a debut national project provides both financial backing and market credibility as Zelestra works toward construction milestones.

Axpo's Storage Commitments

For Axpo, the Zelestra deal adds to a growing roster of battery storage commitments across Europe. Tolling agreements of this length — ten years — are relatively uncommon in the storage sector, where many offtake structures run shorter durations due to uncertainty around technology degradation and evolving market rules. A decade-long arrangement signals a degree of confidence from Axpo in both the regulatory environment underpinning Italian storage revenues and the long-term value of dispatching large-scale battery capacity in that market.

The 830 MWh energy capacity of the project implies a storage duration of approximately four hours at full power output, a configuration suited to participation in capacity markets, ancillary services, and intraday energy arbitrage — all areas where Italian grid operators and market participants have expressed increasing appetite for flexible assets as the country pursues its clean energy transition targets.