Grid connection
Grid architecture and market structure
Italy operates a strict unbundling model. Transmission at high and extra-high voltage is the exclusive responsibility of Terna S.p.A., the Transmission System Operator (“TSO”), which manages the national grid, dispatching, and system balance independently of generation and supply interests. Distribution at medium and low voltage is carried out principally by E-Distribuzione S.p.A., alongside a number of smaller distribution system operators (“DSOs”) responsible for local grid operation, maintenance, the connection of new users, and meter management. The sector is regulated by the Italian Regulatory Authority for Energy, Networks and Environment (“ARERA”), the independent national regulator.
As a consequence of the unbundling framework, data centre sponsors may not own or operate public network infrastructure. Grid connection works (impianto di rete per la connessione) built by a sponsor to connect a data centre to the grid are, as a rule, transferred to and operated by the relevant network operator.
Connection, queue reform, and the geography of capacity
The connection process is the point at which Italy’s institutional ambition meets its physical constraint. Connection to the grid is governed by the Terna Grid Code, which applies, among others, to consumption unit (unità di consumo) with a power capacity of 10 MVA or more. Smaller data centres connect under the technical rules of the relevant DSO.
The standard Terna connection procedure comprises the following stages: (i) submission of a connection request; (ii) issuance by the TSO of a general technical solution (including a connection estimate), which is later replaced by the detailed technical solution; (iii) acceptance of the connection estimate; (iv) execution of a connection agreement covering dedicated works, milestones, and security; and (v) completion of the works, commissioning, and activation of the connection. Overall connection timelines vary considerably, depending on the voltage level, the scale of the connection works (including whether network reinforcement works are needed), the project’s location, and the planning and authorisations procedures applicable to the relevant infrastructure.
Whilst cost allocation depends on the specific rules of the grid operator, as a general rule, data centre sponsors bear the costs – as envisaged under the connection agreement for: (i) submitting the connection request and the technical solution and the review of these documents by the grid operator; (ii) the grid connection works; (iii) the testing and acceptance by the grid operator of the grid connection works.
As of late 2025, there is approximately 66 GW of demand from data centres for connection to the Terna grid, although this figure does not include demand from small scale data centres whose connection procedures are handled by DSOs. Data centre projects are heavily concentrated in the north of Italy, with only 20% of demand coming from the south of Italy and approximately 20 GW in the metropolitan area of Milan alone.
There are no fast-track or priority mechanisms currently envisaged under the Terna Grid Code for particular categories of data centre. The government is, however, currently actively encouraging the installation of data centres and has sought to simplify the authorisation process. Recent legislative reforms have introduced a single authorisation procedure for certain categories of data centres and relevant user connection works (opere di connessione di utenza) regardless of their voltage, helping to coordinate planning, environmental, and sectoral clearances under one unified procedure.
As noted, availability of capacity remains uneven across the country: demand (and, as a result, connection backlogs) is heavily concentrated in northern regions with strong industrial grids and fibre backbones, notably Lombardy. Whilst there are currently no national legislative measures designed to rebalance the geographic allocation of data centres, it is possible that the Italian government will seek to address this imbalance legislatively in the coming years.
Meanwhile, the “Strategy for Attracting Foreign Investment in Data Centers” - published on the website of the Ministry of Enterprise and Made in Italy in November 2025 – has promoted the development of data centres in Southern Italy. Regional governments have taken note of that policy signal: the Apulia Region has adopted high-level siting guidance to attract data centre investments, leveraging (among other factors) its logistics capacity, its central Mediterranean location, good connectivity to data networks (including several major submarine cables), low seismicity, and high renewable energy production that can help lower net electricity consumption and emissions.
Flexibility, charging and electricity supply
Large electricity consumers such as data centres are not mandatorily subject to flexibility requirements. Large consumers may, however, voluntarily participate in Terna’s auctions concerning the interruptibility (now instantaneous peak demand response service – servizio di modulazione straordinaria istantanea in aumento) and demand response services, with remuneration defined under ARERA-approved mechanisms.
Usage tariffs for large electricity consumers such as data centres are set periodically by the ARERA through a system that protects the interests of users and consumers and aims to ensure the promotion of competition, the efficiency of public utility services and adequate levels of quality in those services. Connection charges are envisaged for (i) transmission and dispatching services; (ii) distribution service; (iii) metering service; and (iv) the general costs associated with the electricity system (such as research costs, incentives for the use of renewable energy sources, social tariffs for customers in financial difficulty, concessions for high-energy-consumption customers, the decommissioning of nuclear power stations, etc.) or additional network costs (such as equalisation mechanisms and measures to improve service quality).
Data from late 2025 shows that smart meters account for almost all of the total number of meters (approximately 97%). Furthermore, the replacement of first-generation smart meters with second-generation smart meters is under way.

