Why should you invest in battery storage in Europe?

In Europe, the capacity of renewable energy sources is growing very rapidly, while traditional power plants are slowly being decommissioned. That’s creating a unique new opportunity for investors amid the emerging demand for battery storage, which provides balance to electricity markets.

Is energy storage a good investment in Europe?

Compared to classic renewables, energy storage has really only become an investable asset in Europe over the last few years on the back of technology advances, market price signals, and government support mechanisms.

How much energy storage will Europe have by 2050?

Overall, total energy storage in Europe is expected to increase to about 375 gigawatts by 2050, from 15 gigawatts last year, according to BloombergNEF. We spoke with Grebien about electricity market trends, energy storage technologies, as well as the investment and financing opportunities emerging from these technologies.

How do energy storage assets make money in Europe?

For short-duration energy storage assets, there are really three key revenue streams for energy storage assets in Europe. The first one is capacity payments, which have become a broadly implemented policy measure by governments to support system reliability and incentivize the installation of certain new power asset types.

Is energy storage a new asset class?

“With energy storage, there's a new and interesting asset class emerging, and the business model is fundamentally different to that of wind and solar,” says Ingmar Grebien, who leads GS Pearl Street and is a managing director in Goldman Sachs Global Banking & Markets.

Are energy storage assets a power trading asset?

In contrast to wind and solar, where the asset owner simply sells power into the grid when produced, energy storage assets are power trading assets. Different revenue streams can be stacked, and continuous trading decisions have to be made on whether to buy power, sell power, or participate in ancillary services.