Record 3.7 GW of projects were added in 2024, taking Europe's total battery capacity to 10.8 GW.
The expected leap in capacity is unlikely to be enough to meet demand to balance national energy grids, according to industry estimates.
Aurora Energy Research forecast capacity will increase to over 50 gigawatts (GW) by 2030, representing investments worth around 80 billion euros ($82.80 billion).
This would still leave a shortfall, compared with expectations from industry group the European Association for Storage of Energy, which estimates 200 GW will be needed by 2030.
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The cost of building a project in Britain has fallen around 30% in two years to just above GBP 500,000/ MW for a 2-hour duration project, resulting in returns of around 12%.
The trend looks set to continue. Average battery prices fell from $153 per kilowatt-hour (kWh) in 2022 to $149 in 2023 and could fall to as low as $80/kWh by 2026, analysts at Goldman Sachs said.
Trading Opportunities
Now that renewable generation is a bigger share of the power mix, price volatility also offers the prospect of rich returns for traders on wholesale energy markets.
At times when more wind or solar is produced than the grid demands, electricity prices have turned negative and battery operators can be paid to store the power for times of need.
"If you can be paid to charge your battery because prices are negative and then sell the electricity at a premium price when the sun goes down at 6 o'clock, then that can be lucrative for traders," said Roberto Jimenez, executive director at BW ESS, part of global infrastructure firm BW Group.
Data from LSEG shows the number of hours priced at negative or around zero in Britain's day-ahead electricity market hit a record 176 hours in 2024. It forecasts an almost four-fold increase to 792 hours in 2026.
The picture across Europe is similar. The number of German negative hours is forecast to grow from less than 500 hours in 2024 to above 900 hours in 2026, LSEG forecast.
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