Energy storage in Europe is no longer entirely dependent on state support. The drop in battery prices—both at the cell and system level—is paving the way for a maturing market moving toward full commercial viability. This was highlighted by Jacopo Tosoni, Head of Policy at the European Association for the Storage of Energy (EASE), during the Líderes SEC interview series organized by Strategic Energy Corp.

“We’re definitely seeing many projects that are fully commercial and don’t rely on state aid, mainly front-of-the-meter projects. And although it’s less common in the commercial and industrial sectors, there are also players deploying energy storage,” said Tosoni with Strategic Energy Europe during the Líderes SEC series.

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He noted that between 2023 and 2024, battery prices dropped by double digits at both the cell and system level, and further significant declines are projected for the 2024–2025 period. While a stabilization is expected in the medium term, competitiveness will continue to rise. “We will see larger projects, with longer durations, and increasingly co-located projects, because yes, this is definitely a cost-competitive technology and a profitable solution,” he emphasized.

A horizon of revenue and competitiveness

The consolidation of profitability in this segment depends not only on cost reduction. According to Tosoni, new sources of revenue through more developed system services are also essential.

“Primary, secondary, and tertiary reserve services could account for up to 50% or more of total revenues,” noted the EASE policy expert, although he regrets that these mechanisms are still not remunerated in many countries. He also anticipates further development of ultra-fast ancillary services, which are beginning to emerge in specific contexts across the continent and could become more established in the coming years.

From the cost perspective, adapted taxation and the reduction of double charging will contribute to improving the total cost of ownership.

Moreover, technological evolution is driving efficiency: “We’re no longer the new kids on the block in the storage sector,” said the expert. Today’s battery and system designs are specifically optimized for energy storage, leaving behind their origins in the automotive industry.

A fragmented but expanding market

Despite the optimism surrounding technological and commercial advancement, Tosoni also warned about structural barriers that slow down investment. Among them are disproportionately high grid fees, elevated taxes, and the lack of implementation of EU regulations at the national level.

“There are many countries in Europe that haven’t transposed this EU legislation, and that, of course, is a barrier; it still creates uncertainty and slows progress,” the executive warned. Although the European Union has promoted positive reforms in the electricity market, effective implementation now rests with Member States, which results in a fragmented regulatory landscape.

Three regional leaders
In this scenario, the United Kingdom, Germany, and Italy stand out as leading markets in Europe. “Historically, the UK has been the leading market, with a favorable regulatory environment and a solid capacity market,” Tosoni noted. The country is already promoting long-duration storage projects, one of the sector’s next technological frontiers.

Germany, for its part, leads behind-the-meter storage, and is also becoming a promising market for front-of-the-meter and large-scale projects. Italy stands out for its MACSE program, managed by Terna, the national grid operator, which mobilizes strategic financing to expand energy storage infrastructure.

Outlook to 2030: more flexibility, more technologies

The growth of energy storage is closely linked to Europe’s ambitious renewable energy targets. The need for electrical flexibility will be critical in the coming years, leading to a larger and more mature market.

“Various studies show that we will need more than double the flexibility we required at the beginning of this decade,” Tosoni stated, pointing out that growth will be “dramatic” and will continue at double-digit rates annually.

“In recent years, growth has been impressive, driven by post-COVID recovery funds and support following the Russian invasion. We no longer have those same support schemes, but we do have more mature markets, more revenue sources, and the ability to combine them. So growth will remain strong, especially in the battery sector,” he analyzed.

While batteries will continue to lead in installed capacity, the policy chief also highlighted the growing role of long-duration storage, such as pumped hydro, which is gaining traction in both Italy and the UK. He also anticipates greater technological diversification to meet intra-day, weekly, and even monthly flexibility needs.

Uneven conditions in Europe and industrial impact

Looking ahead, Tosoni stressed that the sector’s consolidation will depend on the creation of favorable conditions in each country. “A lot of good work has been done, but now it’s up to each country to create the right conditions for the technology. This isn’t necessarily positive, as we will see very different levels of attractiveness for energy storage, especially front-of-the-meter,” he anticipated.

At the same time, he sees a major opportunity in the commercial and industrial sector, which remains underdeveloped from a regulatory perspective. “Several technologies can contribute to industrial decarbonization and to what we call competitive electrification, meaning electrification capable of reducing operational costs,” he explained, adding that there has been a lot of activity since the launch of the Clean Industrial Deal.

“It’s a topic that hasn’t been widely addressed from a legislative point of view. Perhaps regulation is needed—or at least better guidance for Member States and industry players on how to deploy these storage solutions at the industrial level,” he added.

It is a market with systemic potential: “It’s a huge market that can benefit everyone—delivering services to the electricity system while also ensuring cheap electricity for industry. That’s vital in a context where Europe’s industrial sector is facing serious challenges,” he concluded.