Aurora Energy Research has published the fifth edition of its European Battery Markets Attractiveness Report (BATMAR), identifying Germany, Great Britain and Italy as the leading battery markets among 28 European countries.

Germany ranks first, driven by significant demand for flexibility linked to decarbonisation initiatives, supporting robust market growth in both the near and long term. Great Britain ranks second, backed by substantial installed capacity and diversified revenue streams. Italy ranks third, with short-term progress largely influenced by the MACSE subsidy, which supports the development of long-duration energy storage.

Capacity growth and investment outlook

Between 2024 and 2025, Europe’s installed battery capacity increased by more than 7GW to just above 17GW. Aurora forecasts that European battery capacity will exceed 80GW by 2030.

Longer-duration batteries are expected to gain popularity as capital costs decline and flexibility needs increase in decarbonising power markets. Around €24 billion is projected to be invested in four-hour batteries by 2030, accounting for more than half of total expected investment.

Markets at different stages of development

“Battery markets in Europe are evolving rapidly,” said Eva Zimmermann, Pan-European Senior Research Associate at Aurora Energy Research. “But they are still at different stages of market development: while Great Britain, Germany and Italy are maturing and as a result face issues such as grid connection constraints, more nascent markets only have their first projects coming online in 2026 or later.”

Anne Geschke, Pan-European Senior Research Analyst at Aurora Energy Research, added that opportunities for market players are shifting as battery deployment scales across Europe. “Market players with more risk aversion may look to buy into existing projects in more mature markets, while others may look to establish themselves in markets where batteries are gaining traction only just now.”

Emerging markets and new challenges

The report notes that Southeastern European markets, including Romania and Bulgaria, now rank among the top 10 battery markets in Europe, supported by improving battery economics and stronger policy support.

At the same time, rising system flexibility needs and questions around managing grid connection pipelines are bringing grid issues to the forefront. Discussions around flexible grid connection agreements (FCAs) and their potential implications for battery economics are ongoing in many countries.

“As realising large-scale projects becomes more of a challenge in markets with few secure cash flows, battery investors are starting to move to more innovative offtake structures such as tolling agreements to secure financing,” said Jörn Richstein, Research Lead, Pan European Power Markets, Policies & Technologies, at Aurora Energy Research.