April 25, 2024

Europe’s Battery Storage Boom Is An $84 Billion Investment Opportunity

Europe is set for a boom in battery storage installations with grid-scale capacity expected to jump sevenfold by the end of this decade and represent $84 billion (78 billion euros) in total investment opportunities through 2050, Aurora Energy Research said in a new report this week.

As a key enabler of renewables rollout, battery storage is set for a massive acceleration by 2030, according to Aurora Energy Research’s European Battery Markets Attractiveness Report, which examines 24 countries to determine which offer the most attractive investment opportunities for

Battery Energy Storage Systems (BESS).

Aurora expects Europe’s installed grid-scale BESS capacity to jump from 7.1 gigawatts (GW) as of the third quarter of 2023 to 51 GW by 2030 and 98 GW by 2050.

In total, these capacity additions would represent a cumulative investment opportunity of $84 billion (78 billion euros) through 2050, including repowering opportunities, Aurora noted.

Great Britain, Italy, and Ireland will lead the pack in grid-scale battery storage investment, thanks to solid spreads, strong policy support, and capacity market remuneration, according to Aurora.  

The UK is the most attractive market in Europe, thanks to attractive and stackable revenue streams. Britain also has the most installed capacity as well as the most capacity in the pipeline, Aurora said.

The pipeline of UK energy storage projects jumped by two-thirds over the last 12 months, RenewableUK said at the end of last year. Operational battery storage capacity has grown to 3.5 GW, and the capacity of projects under construction has reached 3.8 GW, RenewableUK’s EnergyPulse Energy Storage report showed. A further 24.5 GW has been consented, 27.4 GW has been submitted in the planning system, and 25.7 GW is at an early stage of development but is yet to be submitted.  

Despite the attractiveness of battery energy storage as an enabler of more renewable electricity, “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,” said Ryan Alexander, Research Lead, European Power Markets, at Aurora Energy Research.

By Tsvetana Paraskova for Oilprice.com

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