Ambitious European net zero targets, cutting dependency on Russian fossil fuel, regulatory change and growing investor confidence will unlock 42 GW of vital energy storage capacity.
Europe has set out some of the world’s most ambitious decarbonisation targets. And the pace of change is accelerating: after the Russian invasion of Ukraine, the European Commission set out a RePowerEU plan to cut Europe energy dependency on Russian gas well before 2030. The proposed plan will double the share of variable renewables in power generation, passing 60% by 2030. Energy storage will play a crucial role in that rapid evolution, providing vital system flexibility.
As a result, the region’s nascent grid-scale energy storage segment is growing fast. We forecast that total capacity will expand 20-fold between now and 2031.
Europe’s grid-scale energy storage market will reach 45 GW/89 GWh by 2031
In 2022 alone, European grid-scale energy storage demand will see a mighty 97% year-on-year growth, deploying 2.8GW/3.3GWh. This reflects energy storage’s emergence as a mainstream power technology.
Over the next decade, the top 10 markets in Europe will add 73 GWh of energy storage, amounting to 90% of new deployments.
The UK will retain its crown as the region’s leading grid-scale storage market through to 2031, adding 1.5GW/1.8GWh in 2022 alone. With investor confidence around the profitability of energy storage assets rising, the UK holds the largest storage project pipeline in Europe, with 25 projects above 100 MW. The saturation of fast-response ancillary markets will see UK energy storage project development more tightly linked to renewable energy growth, pushing for longer duration storage assets from mid-decade.
Ireland will hold second place in 2022, with 0.31 GW/0.37 GWh of new deployments. However, as the chart above shows, Italy claims that runner-up position in the decade to 2031 overall.
By 2030, Italy will have the second largest solar penetration rate in power supply in Europe, behind Spain, at around 20% – up from 10% in 2020. This significant growth, together with high spot prices, limited interconnection, and favourable policy mechanisms (such as the new capacity market auction) will push grid-scale energy storage segment growth.
Germany takes the third position in terms of newly-added grid-scale capacity through to 2031. However, putting together grid-scale and behind-the-meter capacity, Germany will become the leading energy storage market in Europe through to 2031.The pace of growth varies considerably across European markets. Read the full report for a country-level view – fill in the form at the top of the page for a complimentary extract.