Independent energy company NatPower and Tesla have signed a multi-year agreement to develop 25 GWh of battery energy storage capacity across Italy and the United Kingdom, marking the first phase of a large-scale initiative valued at up to US$5 billion.
The partnership comes as European countries accelerate investments in battery energy storage systems (BESS) to support the growing integration of renewable energy and strengthen grid reliability. Energy storage has become increasingly important for balancing intermittent power generation from solar and wind projects while improving overall grid flexibility.
Under the agreement, NatPower will deploy Tesla’s Megapack utility-scale battery energy storage system across the planned projects. The company will also utilize Tesla’s energy trading software, which optimizes battery operations by determining when electricity should be stored, purchased, or sold based on market conditions.
The collaboration will begin with five initial battery storage projects, representing the first stage of a broader programme that aims to develop more than 100 GWh of energy storage capacity in the coming years. The total construction cost for the programme is estimated at US$4 billion to US$5 billion.
According to the companies, the long-term initiative has the potential to generate more than US$15 billion in revenue over the next 20 years, highlighting the growing commercial opportunity in utility-scale energy storage.
The partnership is expected to accelerate battery storage deployment by combining Tesla’s energy storage technology with NatPower’s project development expertise. The companies aim to create a scalable model that aligns technology, capital, and project execution, enabling faster delivery of critical energy infrastructure across multiple markets.
The agreement reflects the rapid expansion of Europe’s battery storage sector as governments and utilities invest in flexible energy infrastructure to support decarbonization targets, enhance energy security, and manage increasing electricity demand driven by renewable energy adoption.
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