Great Britain, Italy, and the Ireland are the top three markets for battery storage investment within Europe, latest findings from Aurora Energy Research reveal.
The top players have several shared attributes, including solid spreads, strong policy support and capacity market remuneration, which provide investors with long-term contracted revenue, yet they differ widely regarding the markets’ maturity and size.
Aurora’s third edition of its European Battery Markets Attractiveness Report examines 24 European countries to highlight the most attractive markets for battery energy storage systems (BESS) investment while also delving into evolving market dynamics and regulatory landscapes.
Great Britain has long been a frontrunner in battery and battery investments, boasting the most installed capacity as well as the most capacity in the pipeline.
As Aurora’s data shows, Great Britain’s robust installed capacity and growth-a projected quadrupling of capacity-supported by attractive and stackable revenue streams, make it the most attractive market in Europe.
Italy’s ambitious target of 9GW battery capacity by 2030, coupled with the opening of its ancillary markets to BESS, and the Ireland ISEM’s strong revenue potential with the extension of lucrative DS3 tariffs, also make them attractive markets to explore.
Emerging opportunities identified in Spain and Greece are further emphasised by Aurora’s analysis.
These opportunities are driven by robust public support, including public auctions for capacity allocation.
Dedicated auctions for standalone or co-located battery storage in Europe have, to date, subsidised at least 1.8GW of batteries in Germany, Greece and Spain.
Upcoming auctions could procure over 15GW across Europe by 2030, notably 9GW of procurement from Italy’s new storage capacity procurement mechanism, MACSE, which aims to cover both capital and operational costs.
Overall, the pace of growth in the sector at a European level is accelerating.
Rising from 7.1GW of installed grid-scale BESS capacity across Europe as of Q3 2023, Aurora’s Central
Ryan Alexander, Research Lead, European Power Markets, Aurora Energy Research, said: “The market for grid-scale energy storage is set to increase exponentially in the coming years.
“This is no surprise-energy storage is one of the key enablers of the energy transition, and a complex interplay of cost and revenue factors are coming together to create a substantial investment opportunity.
“However, battery markets are challenging to navigate, and developers and investors alike will need to embrace complexity to deliver a compelling business case or keep a look out for public support schemes that can help them get a kick-start in emerging storage markets.”