The European battery storage market presents a promising future

The advancement of renewable energies, electrification, and recent tensions in energy markets have made battery storage an essential component for the stability, flexibility, and security of the European electrical system.

The European battery storage market continues to expand rapidly. According to the European Market Outlook for Battery Storage 2025-2029 report by SOLAR POWER EUROPE, 21.9 GWh were added in 2024, bringing the total to 61.1 GWh. Although the growth rate has slowed, installations of 29.7 GWh are expected in 2025, and total European capacity is projected to reach 400 GWh by 2029. The main drivers for growth in this sector have been electricity price volatility, the reduction in the production cost of lithium-ion batteries, and the diversification of the sector into new markets.

Within the European market, Germany, Italy, and the United Kingdom lead energy storage installations, accounting for more than two-thirds of the total. Currently, the five main markets—including Austria and Sweden—together hold nearly 80% of the installed capacity in Europe.

GERMANY

In 2024, Germany solidified its position as the European leader in battery storage with an installed capacity of 6.2 GWh. In this context, large-scale storage in the country experienced a remarkable growth of 140%, reaching approximately 800 MWh. Additionally, micro-storage installations (those with capacity under 5 kWh), especially those linked to small solar systems, also saw a significant increase of 44%.

ITALY

In 2024, Italy installed 6 GWh of new BESS (Battery Energy Storage System) capacity, reaching 12.9 GWh—the second highest figure in Europe, just behind Germany. This progress, driven by projects with guaranteed tariffs and participation in electricity markets, allowed Italy to become the leading European market in annual large-scale battery volume, reaching 3.4 GWh installed, even surpassing the UK.

However, sector development has been impacted by delays in grid connections, limiting part of the planned capacity for 2024, highlighting the need to further streamline administrative processes to meet Terna operator’s target of 58 GWh of new capacity by 2030. Furthermore, access difficulties—such as those established by the latest program “Transition 5.0”—have discouraged private sector interest.

UNITED KINGDOM

In 2024, the UK saw a decline in new battery storage installations, with a 22% drop leaving the total capacity at 2.9 GWh. This decrease was mainly due to delays in large-scale projects, whose activity fell by 31%.

AUSTRIA

Austria established itself this year as the fourth largest European battery storage market, recording a record year with 1.1 GWh of new installations, raising its total capacity to 2.8 GWh. This success is largely attributed to a funding program launched early in the year (2024), which offered a fixed aid of €200/kWh for batteries with capacities between 4 and 50 kWh. The allocated budget of €35 million was exhausted by May due to high demand.

SWEDEN

Sweden, for its part, climbed to fifth place among European BESS markets in 2024, consolidating its presence after three consecutive years of growth. During this period, the country added 1.7 GWh of new installed capacity, demonstrating a notable acceleration in its progress in this key sector.

Despite the growth of BESS in Europe, its development largely depends on political momentum. According to SolarPower Europe, an urgent action plan for energy storage and the creation of a true Single Market to facilitate cross-border deployment is needed. Additionally, improvements are required in grid connection procedures, storage-adapted price design, and fair access to electricity markets.

A PROMISING FUTURE FOR SPAIN:

Although Spain was not among the top five European countries for battery installations in the 2024 SolarPower report, it has the most ambitious national targets on the continent. The incorporation of 1.3 GWh of new storage capacity is expected. By 2029, an accumulated potential of 27.5 GWh is projected.

To boost this development, the Spanish government has launched an unprecedented aid package, allocating €700 million from FEDER funds to promote the production of energy storage systems. These aids, managed by IDAE, could co-finance up to 85% of investments in energy storage installations.

Although Spain did not reach the target in 2024, it is expected to enter the Top 5 in 2025 alongside the Netherlands, achieving 4% of European capacity, while the Netherlands would reach 5% of the total. This trend would continue until 2029, with variations in market shares: the UK would surpass Italy, reaching a 19% share equal to Germany’s. Both the Netherlands and Spain would continue growing, though at a more moderate pace, reaching approximately 7% of the European market each.