NatPower and Tesla plan $5 billion battery storage push in Europe

NatPower and Tesla agreed to build 25 gigawatt hours of battery storage in Italy and Britain, a first phase of work that could grow into a project worth as much as $5 billion. The scale is large enough to move 1 gigawatt of electricity for 25 hours, or 5 gigawatts for five hours, which is the kind of capacity that can matter when solar fades at dusk or wind output drops unexpectedly.

The companies said the rollout would begin with five projects and eventually exceed 100 GWh of storage. NatPower said the assets will be sited in Italy and the United Kingdom and will be owned and operated by NatPower, while an ESS News report placed the first five projects in Sicily and the United Kingdom. That geography matters: both countries are trying to absorb more variable renewable power without leaning as heavily on gas-fired backup when demand jumps.

Tesla’s role centers on Megapack, its utility-scale battery product, and Autobidder, the company’s real-time trading and control platform that bids power into markets and manages dispatch. In plain terms, the systems are designed to soak up cheap electricity when supply is abundant and release it when prices rise, a function that can trim short-term volatility and support grid stability. Tesla describes Megapack as a utility-scale battery intended to stabilize the grid and prevent outages.

The financial stakes are substantial. NatPower and Tesla estimated construction spending at roughly $4 billion to $5 billion and said the project could generate more than $15 billion in revenue over 20 years. For Tesla, the deal also underscores how battery storage has become one of the company’s most important energy businesses, separate from electric vehicles and tied to software-driven market trading as much as hardware.

The agreement lands in a European storage market that is expanding quickly. SolarPower Europe said the EU installed 27.1 GWh of new battery storage in 2025, with utility-scale systems making up 55% of additions, and the bloc’s battery fleet jumped from 7.8 GWh in 2021 to 77.3 GWh in 2025. Energy Storage Europe and LCP Delta said Europe added a record 13.5 GW, or 26.4 GWh, of electrochemical storage in 2025 and is on track to reach 100 GW across all technologies.

Italy is emerging as one of the key battlegrounds. Modo Energy said the country is on track to exceed 2 GW of battery capacity by 2026 and already has more than 6 GW of projects ready for construction. Against that backdrop, a 25 GWh buildout would not replace fossil-fuel generation, but it could materially reduce the need for backup plants during the daily peaks that still set power prices across much of Europe.