– Europe’s energy sector shifting focus towards energy storage systems
– Growth expected in energy storage capacity in Europe
– Barriers to investing in energy storage include policy/regulation, economics and technology risks
In this edition of Smart Energy’s Power Playbook column, Yusuf Latief delves into the energy storage financing landscape in Europe, exploring different instruments and models available for investors entering the space. Europe’s energy sector is shifting its investment focus towards integrating renewable generation projects into the power grid, particularly through energy storage systems to balance intermittency and enable ancillary services. However, deployments are not meeting the necessary targets according to Eurelectric’s study.
Aurora Energy Research predicts significant growth in grid-scale battery energy storage system capacity in Europe by 2030 and 2050, representing a substantial investment opportunity. Despite this positive outlook, barriers such as policy and regulation, economics, and technology pose challenges to the financeability of energy storage projects. The study suggests utilizing various financial instruments at the EU and member state levels to overcome these barriers and promote investment in innovative energy projects.
ID-E’s mapping exercise identified multiple financing and support schemes for energy storage across EU member states, with loans and grants being the most common. However, the study highlights the need for more dedicated financial support schemes for energy storage, especially for smaller companies and households. It also emphasizes the importance of expanding the offering of financial schemes in countries with lower market maturity to mobilize private financing for storage projects.