European energy storage: a new multi-billion-dollar
In Europe, the capacity of renewable energy sources is growing very rapidly, while traditional power plants are slowly being
While energy storage is already being deployed to support grids across major power markets, new McKinsey analysis suggests investors often underestimate the value of energy storage in their business cases.
Energy storage is shifting electricity, and it makes money from buying, selling, and trading the difference between low- and high-priced hours in the market. Storage assets therefore depend on price spreads, which tend to be higher with more imbalances. Imbalances, in return, are driven by more renewables.
Imbalances, in return, are driven by more renewables. Energy storage is therefore well-positioned for an electricity market dominated by renewables and represents an interesting new asset class. It's also a potential hedge for players who already have classic renewable portfolios.
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.
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