Aurora Energy Research has released its anticipated third edition of the European Battery Markets Attractiveness Report. The comprehensive document, examining 24 European countries, identifies prime markets for Battery Energy Storage Systems (BESS) investment and provides insights into evolving market dynamics and regulatory landscapes.

According to the latest findings from Aurora, Great Britain, Italy, and the Ireland have emerged as the top contenders for battery storage investment within Europe. These leading markets share common attributes such as solid spreads, strong policy support, and capacity market remuneration, offering investors long-term contracted revenue. However, they vary significantly in terms of market maturity and size.

According to the report, Great Britain leads the pack in battery investments, boasting the highest installed capacity and the largest pipeline of projects. Aurora's data reveals that Great Britain's substantial installed capacity, coupled with projected quadrupling growth, supported by diverse and lucrative revenue streams, positions it as the most appealing market in Europe.

Italy is also on the radar with its ambitious target of achieving 9 GW of battery capacity by 2030. The recent opening of ancillary markets to BESS adds to its attractiveness. Meanwhile, Ireland's extension of lucrative DS3 tariffs enhances its revenue potential, making both countries attractive markets to explore.

A new territory for Spain and Greece

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 1.8 GW of batteries in Germany, Greece, and Spain; upcoming auctions could procure over 15 GW across Europe by 2030, notably 9 GW 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 7.1 GW of installed grid-scale BESS capacity across Europe as of Q3 2023, Aurora’s Central outlook sees total capacity grow sevenfold to 51 GW by 2030 and 9 8GW by 2050; these new capacity additions represent a cumulative investment opportunity of 78 billion € through 2050, including repowering opportunities.

Ryan Alexander, Research Lead, European Power Markets for Aurora Energy Research, explained that "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.”