Europe could hit 42 GW by 2030 and 95 GW by 2050 of grid-connected, utility-scale battery energy storage capacity (>10 MW), according to figures from Aurora Energy Research. The capacity additions represent a cumulative investment opportunity of more than €70 billion between 2023 and 2050. More than 40% of this capital will be deployed by the end of 2030.
Batteries with more than four hours of storage capacity will account for 61% of total installed battery capacity in 2050, up from 22% in 2025, said Aurora Energy Research in its latest report. It identifies Germany, Great Britain, Greece, Ireland, and Italy as Europe’s most attractive markets, due to policies, regulatory support, revenue stacking opportunities, and demand for low-carbon flexible energy.
Greece, for example, has set the most ambitious battery storage targets in Europe, at 6 GW by 2030. It is followed by Italy's 3 GW by 2030 target, whereas Great Britain and Ireland offer good revenue stacking opportunities.
However, the report states that there is still scope for further growth of Europe's big battery fleet. Aurora Energy Research notes that 14 of the 24 countries it assessed do not yet have strategies or targets for energy storage deployment. One of these countries is Germany, but the sheer scope of its rapidly growing renewables capacity make it an attractive storage market.
“Batteries represent an attractive investment opportunity in Europe’s energy sector,” says Ryan Alexander, Aurora Energy Research's European power markets research lead. “There will undoubtedly be an early mover advantage for investors: the anticipated surge in demand for batteries over the next decades creates saturation risk, causing revenues to decline as markets become overcrowded.”
In a separate report last week, research firm LCP Delta said that 4.5 GW of battery energy storage capacity was installed in 2022, including 1.9 GW of grid-scale battery projects. LCP Delta says that 3.7 GW of big batteries are set to go online in 2023, mainly driven by growing demand for flexibility in power systems with growing renewable energy fleets.
The publication of the reports coincide with a statement from European Commission’s commissioner for energy, Kadri Simson, highlighting the importance of storage for Europe’s decarbonization efforts.
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“We have a lot of topics on our agenda. But storage is the centerpiece for building a decarbonized, flexible and cost-effective energy system, through electrification and energy system integration,” Simson said last week. “the fact is that the role of storage is often overlooked.”
Several high-level measures are under development at this point to help kick-start the energy storage market in Europe, including revisions of the Electricity Market Design, a European Commission recommendation on energy storage for member states, and a storage-friendly network code.
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