NatPower and Tesla announced a multiyear agreement to develop 25 gigawatt hours (GWh) of battery storage facilities in Italy and Britain, representing the first phase of a programme that could ultimately become a multibillion-dollar undertaking.
Under the terms of the deal, NatPower will equip the sites with Tesla’s Megapack battery storage systems. The partnership also includes use of Tesla’s trading technology to govern when electricity is purchased and sold from the assets.
The initial rollout will consist of five projects. Those five installations form the opening tranche of a programme that the companies say is designed to grow beyond 100 GWh of storage capacity. The construction cost for this phase is estimated in a range between $4 billion and $5 billion, and the broader project is described as having a value of up to $5 billion.
The companies projected that revenue tied to the programme could potentially exceed $15 billion over a 20-year period. They framed the agreement as combining technology, capital and execution capability in order to deliver large-scale storage infrastructure.
"The sector has access to technology and capital but still struggles to deliver infrastructure consistently and within the required timelines. What we have built with Tesla is an ecosystem that enables alignment between capital and execution, and that can be replicated across multiple markets," said Fabrizio Zago, CEO of NatPower.
The announcement comes as countries across Europe increase deployment of battery storage to help balance intermittent renewable generation. NatPower and Tesla positioned the arrangement as the start of a replicable model to scale storage capacity in multiple markets.
Details provided by the companies focus on the equipment selection, the intended geographic scope of the first phase and the high-level financial metrics for construction and prospective revenue. The five initial projects, the use of Megapack hardware and Tesla trading software, the construction cost band of $4 billion to $5 billion for the first phase, the 25 GWh initial capacity and the target to exceed 100 GWh are the core elements disclosed in the announcement.
Contextual note: The information released by the two firms emphasises the pairing of hardware and trading software as a means to align financing and execution in battery storage rollouts, and underscores the companies' stated intention to replicate the model in other markets.