Issue 08 · 23 October 2026

This week’s takeaways

• Grid operators are gaining more control over batteries. Poland’s new Energy Law amendment lets operators curtail batteries that seriously breach their schedules or instructions.
• Some upfront costs for developers are falling. Great Britain dropped the financial guarantees developers had to post against more than 80 strategic grid works, and the EU ended duties of up to 84% on Chinese solar glass.
• Capacity markets value batteries very differently. Italy’s de-rating factors for a 4h battery range from 21% to 51% by zone, down from 67% last year, while Poland applies 95% to every battery, whatever its duration. That is this week’s deep dive.

How to read this

↑ Tailwind   ↓ Headwind   • Neutral

Tailwind helps the businesses affected. Headwind adds cost, delay or risk. Neutral means no clear overall benefit or drawback, though the change may still matter.

Potential means the effect depends on a proposal being adopted or another condition being met. Consultations are proposals open for feedback. They are listed with their closing dates in the diary at the end.

Our six themes
Market Design · Taxes, Subsidies and Public Programmes · Siting, Permitting and Land Use · Grid · Environmental Markets · Supply Chains

The regulatory picture

Updates in this edition, by market and likely effect. Bar length shows how many updates we cover, not how big their impact is. Consultations in the diary are included, and cross-border measures appear in each affected market. Select a market to jump to its section.

↑ Tailwind • Neutral ↓ Headwind

This week’s deep dive

🇪🇺 Across markets · Market Design

Battery de-rating factors range from 21% to 95% across Europe’s capacity markets

Two capacity markets set their battery rules for 2028 this week. Italy’s Ministry of the Environment and Energy Security approved new auction rules from Terna, Italy’s grid operator, for the auction on 21 December, which covers a national need of about 67 GW. Meanwhile, Poland’s Minister of Energy set the parameters of four auctions for 2028, one per quarter.

Italy now sets de-rating factors by duration and zone. For a 4h battery they are 40% in the North and Centre-North, 51% in the Centre-South and 21% in the South and islands, down from a single national 67% in the 2027 auction. A 1h battery sits at 7% to 13%, and an 8h battery at up to 71%. Terna reduced the factors in August and again in October, with the ministry’s approval, because far more storage has been authorised than it had assumed, especially in the South and islands. The hours of highest shortage risk are saturating with storage, so each extra battery adds less. Existing batteries that bid in the 2027 auction, batteries already under contract and those from Italy’s storage auction keep their earlier factors.

Poland applies one de-rating factor to every battery, 95%, whatever its duration. That is slightly above gas plants at about 93%, against 13% for onshore wind and 2% for solar. But its additional auctions are small, one-quarter contracts for existing units: Poland will buy 500 MW for each of the first and fourth quarters of 2028 and 100 MW for each of the second and third, against Italy’s roughly 67 GW. The price cap rises to 583 złoty per kW per year (about €137k per MW), from 558 złoty for 2027, but the rounds for 2027, held in March, cleared well below it: 186 złoty for the first quarter and just 0.12 złoty for each summer quarter.

At the price caps, a new 4h battery could earn at most about €18k to €44k per MW a year in Italy (cap €86k for new capacity) and €25k in France (cap €72k, factor 35% for 2030-31). Poland’s factor is far higher, but its contracts last one quarter and its summer rounds have cleared near zero. De-rating factors are falling because of saturation: as the fleet grows, each new battery adds less to security of supply. Italy has cut its factors twice since August, and France’s regulator proposed a sharp cut on 8 October for the same reason.

What to watch: Italy’s auction on 21 December, which will show how much new storage wins in each de-rating band, and Poland’s additional auctions on 25 March 2027.

Finland–Sweden interconnector stops reversing flow within the hour

16 October ·  Market Design  Announcement · • Neutral

Fingrid and Svenska kraftnät, Finland and Sweden’s grid operators, will stop Fenno-Skan, the two subsea power links (1,200 MW) between the countries, from reversing flow direction within an hour, from 17 November. Day-ahead flows will be set for a whole hour, and intraday flows can still change every 15 minutes but not reverse mid-hour. Each reversal stresses the subsea cables, and 15-minute trading has made reversals more frequent. Without the rule, the operators might have had to cut the links’ capacity, reducing cross-border trade. Fingrid expects no significant effect on the markets.

EU awards €3.4 billion of Innovation Fund grants

19 October ·  Taxes, Subsidies and Public Programmes  Funding · ↑ Tailwind

The European Commission selected 77 projects in 23 countries for €3.4 billion of Innovation Fund grants, paid for with revenue from the EU’s carbon market. The winners include intraday electricity storage, wind pilots, and factories for solar panels, electrolysers, and batteries. The next call, due in early December, has €1 billion for clean-tech manufacturing.

EU ends duties on Chinese solar glass

21 October ·  Supply Chains / Taxes, Subsidies and Public Programmes  Regulation · ↑ Tailwind

The EU Commission repealed the anti-dumping and anti-subsidy duties on solar glass from China, the front sheet of most solar modules. Combined, the duties ran from about 34% to 84%. The Commission dropped them because there are no EU producers left: the last ones stopped production in early 2025. Glass makes up about 12% to 18% of a standard module’s production cost, so EU module makers can now buy Chinese glass more cheaply. Imported finished modules were never subject to these duties.

Wallonia’s ORES raises distribution charges from 2027

19 October ·  Grid  Decision · • Neutral

The Walloon Energy Commission approved €202.9 million more revenue over 2026 to 2029 for ORES, the main distribution grid operator in Wallonia, for grid investment, cybersecurity, market IT and connections. Users of ORES’s grid will pay from 1 January 2027: about €2.50 a month more for a typical household, or roughly 9% on its distribution charge. The rise lands mainly on consumption tariffs, because producers’ injection tariffs are set separately.

Italy sets 2028 de-rating factors for batteries by duration and zone

19 October ·  Market Design  Decree · ↓ Headwind

The Ministry of the Environment and Energy Security approved the rules for Italy’s 2028 capacity auction, setting battery de-rating factors by duration and zone. For more, see this week’s deep dive.

Poland stops penalising auction winners for negative-price hours

16 October ·  Taxes, Subsidies and Public Programmes / Market Design  Law · ↑ Tailwind

An amendment to the Renewable Energy Sources Act, published on 16 October, changes how much renewables auction winners must sell. From 1 December, generation from a wind or solar farm during negative-price hours will count towards the volume it must sell under its auction contract. Until now it did not, so a plant producing during many negative-price hours could miss that volume over each three-year period and pay a penalty of half its auction price on the shortfall.

Poland lets grid operators curtail batteries

16 October ·  Grid / Market Design  Law · ↓ Headwind

An amendment to the Energy Law lets grid operators curtail or disconnect batteries above 50 kW, and generators from 0.2 MW, for up to 24 hours without compensation after a serious breach of their schedules or instructions. From 31 October, BESS owners must follow operators’ instructions and submit schedules and real-time data. The Energy Regulatory Office can fine owners up to 500,000 złoty (about €118k) per quarter. Polish Power Grid’s grid code, due within three months, will define what a serious breach entails.

Poland sets its 2028 additional capacity auctions

20 October ·  Market Design  Regulation · • Neutral

The Minister of Energy set the parameters of Poland’s four additional capacity auctions for 2028, one per quarter, which top up the capacity bought in the main auctions years ahead. Polish Power Grid seeks 500 MW for each of the first and fourth quarters and 100 MW for each of the second and third. De-rating factors cover every technology: 95% for batteries, about 93% for gas, 13% for onshore wind and 2% for solar. The price cap is about €137k per MW per year. See this week’s deep dive.

Portugal moves part of its grid-constraint costs into network tariffs

15 October ·  Market Design  Decision · ↑ Potential Tailwind

Portugal’s Energy Services Regulatory Authority decided to move part of the cost of resolving grid constraints, which suppliers now pay through a volatile system charge, into the network-access tariff that all consumers pay. The shift starts at 25% of the estimated cost in the last quarter of 2026, then up to 40% each year. Storage stays exempt from that tariff until the end of 2029. The regulator will also design a manual frequency restoration reserve lot for generators and storage with firm power, linked to a new hedging product on OMIP, the Iberian derivatives exchange. That would give batteries a reserve product they can hedge in advance, although its size and pay are not yet set.

Slovakia caps 2027 reserve prices

14 October ·  Market Design  Decision · ↓ Potential Headwind

Slovakia’s regulator set the maximum prices that SEPS, the grid operator, may pay for reserve capacity in 2027, per MW for each hour of availability, open to any technology: FCR €23.80 (2026: €28.00), aFRR up €32.20 and down €10.00, mFRR up €17.50 and down €7.95, and 3-minute mFRR up €21.20 and down €11.21. Every cap is lower than in 2026. SEPS can also run separate battery tenders for up to 15% of each product. The caps set the ceiling on what batteries and other providers can earn from reserve capacity next year.

Swiss regulator recommends lifting a balancing price cap

20 October ·  Market Design  Announcement · ↑ Potential Tailwind

ElCom, Switzerland’s electricity regulator, recommended lifting the €1,000 per MWh cap on the price of activated secondary reserve (aFRR) from July 2027. Set in March 2025, down from €15,000, the cap covers only energy bids from capacity already paid to stand by, so capacity prices and voluntary bids stay uncapped. As it rests on a voluntary agreement, Swissgrid and the providers must both sign off. Lifting it would raise the upside for batteries and hydropower that sell this reserve.

Ofgem frees over 80 grid works from connection securities

20 October ·  Grid  Decision · ↑ Tailwind

Ofgem published the first list of 82 transmission works that connecting projects no longer have to guarantee, including the Eastern Green Link subsea cables and Bramford to Twinstead. Until now, a project relying on such works had to post security, such as a letter of credit, against a cancellation charge if it withdrew, even though the works would be built anyway. Those charges and securities now fall away, and NESO will remove the works from developers’ security statements, freeing cash tied up in guarantees.

Closing by 30 October