- Italian energy developer NatPower and Tesla have signed a memorandum to build over 25 GWh of battery storage capacity across Italy and Britain, using Tesla’s Megapack technology. The programme, the first phase of a 100 GWh ambition, could cost $4-5 billion and generate more than $15 billion in revenue over 20 years.
- The initial five projects – two in Britain and three in Italy – will serve as a blueprint for expansion across Europe and potentially North America.
- By providing dispatchable power and grid services, the portfolio will help absorb excess renewable generation and meet peak demand. Analysts say the deal signals growing investor confidence in storage as a business model.
In a move that underscores the accelerating shift toward flexible grids, energy developer NatPower has struck a landmark deal with Tesla to build one of Europe’s largest battery storage portfolios.
The companies plan to develop at least 25 GWh of storage capacity in Italy and the UK – enough to supply millions of homes for several hours – and are pitching the venture as the vanguard of a 100 GWh platform worth upwards of $5 billion.
The agreement pairs NatPower’s project development expertise with Tesla’s Megapack and Autobidder technology. The first five projects are scheduled to come online in 2027 and will collectively provide 25 GWh of capacity.
NatPower chief executive Fabrizio Zago said the portfolio could earn more than $15 billion over two decades by delivering energy trading, frequency response and capacity market revenues. Tesla will supply its grid‑scale Megapack batteries, which can discharge power for up to four hours and already underpin several large storage projects in California and Australia.
Beyond the headline numbers, the deal introduces a replicable “storage ecosystem.” NatPower plans to package planning, financing, permitting, construction and operation into a repeatable template, enabling rapid rollout across different markets.
The company is already scouting sites in France, Spain and North America, and expects the UK to account for nearly half of the initial 25 GWh. Zago told reporters that aligning capital at scale was critical to drive costs down and attract institutional investors.
The partnership also reflects the growing demand for grid flexibility as renewable penetration rises. Britain’s electricity market, for example, saw negative prices on 78 days last year due to abundant wind output; conversely, gas‑fired plants ramp up during lulls.
Grid‑scale batteries can arbitrage such volatility by charging when prices are low and discharging at peaks. Analysts at Wood Mackenzie estimate that Europe will need about 200 GWh of storage by 2030 to integrate renewable generation and avoid curtailment. With the UK’s Capacity Market increasingly valuing flexibility, NatPower and Tesla could capture lucrative revenue streams.
Transformative scale
Financing remains a challenge. The $4-5 billion cost will require debt and equity partners, and long‑term contracts are scarce. However, investors are warming to storage as merchant revenues strengthen and policy support grows.
Britain’s National Infrastructure Commission recently recommended quadrupling storage capacity by 2035, while Italy’s grid operator Terna is tendering for capacity contracts to build 9 GWh of batteries. By locking in Tesla as a technology supplier, NatPower gains supply chain certainty and access to software that optimises energy trading.
For Tesla, the deal expands its foothold in Europe’s storage market and could help meet newly minted trillionaire Elon Musk’s goal of making energy storage a business as large as its electric vehicle division. The company sold more than 15 GWh of Megapacks last year and has been aggressively scaling production at its Lathrop, California “Megafactory.” Teaming with NatPower provides a customer with deep regulatory knowledge and land development capabilities.
If successful, the partnership could catalyse a wave of similar alliances, pairing technology providers with project developers to unlock the billions required for energy storage infrastructure. For the UK, the projects promise to enhance resilience and help avoid curtailment of offshore wind, bringing the country closer to its 2035 decarbonised power goal.
