Of 24 European countries analysed, the most attractive markets for battery energy storage systems (BESS) investment are the UK, Ireland and Italy.

This is the conclusion of Aurora Energy Research, an Oxford-based analytics and battery storage advisory company, in its third edition of its European Battery Markets Attractiveness Report.

These countries have several shared attributes: 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.

The UK 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 I-SEM’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 outlook sees total capacity grow sevenfold to 51GW by 2030 and 9 8GW by 2050; these new capacity additions represent a cumulative investment opportunity of €78bn through 2050, including repowering opportunities.

Ryan Alexander, research lead, European Power Markets, Aurora Energy Research, commented: “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

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