Executive Summary

• There is ‘huge’ potential for battery investment in Europe but also globally, according to Aurora Energy Research, based on a confluence of factors from falling BESS costs, to growth in variable renewables, to the phasing out of ageing thermal capacities in many different markets
• ContourGlobal and FlexGen are two providers who have expanded their European presence in recent months, particularly entering the UK market
• Storage is ‘not simply supporting the energy transition; it is enabling it by making power systems more flexible, resilient, and efficient’, says Carlo Zorzoli, executive vice-president Europe & Africa at ContourGlobal

 

In February, Aurora Energy Research published its latest European Battery Markets Attractiveness Report (BATMAR). The 2026 study – the fifth edition – ranked the top three battery markets on the continent in order as Germany, Great Britain, and Italy, with Britain being praised by Aurora for ‘substantial’ installed capacity and ‘diverse’ revenue sources.

As Aurora explained in a webinar accompanying the report in March, there is ‘huge’ potential for battery investment, in Europe but also globally. This is based on a confluence of factors: cost of battery energy storage systems (BESS) continuing to fall; growth in variable renewables; and the phasing out of ageing thermal capacities in many different markets.

SolarPower Europe, in its European Battery Market Outlook 2026-2030 report, puts it this way: battery storage, once the missing piece of Europe’s energy transition, is now one of the defining technologies of its next phase. Depending on who you read, many analysts agree that Europe’s battery capacity will at least roughly quadruple between now and the end of the decade.

All three leaders have a sizeable market as well as decent project economics, as Eva Zimmerman, lead, flexible energy, pan-European power markets at Aurora, explained. From an investor perspective, Zimmerman noted, what particularly stood out in the UK was stability, with the country boasting one of the most advanced policy frameworks for batteries.

Fast forward to June, and a couple of interesting press releases hit the wires, with two companies announcing their entries into the UK market, albeit with slightly different priorities. ContourGlobal did so through the planned acquisition of Wallace, a 500 MW/2,000 MWh battery energy storage project in Ayr. At the time Antonio Cammisecra, CEO of ContourGlobal, said the UK combined a ‘world-class regulatory environment’ with a ‘deep and liquid energy market and a critical and growing need for flexible storage assets to support the integration of its wind generation capacity.’

Speaking to Electrical Insight, Carlo Zorzoli, executive vice-president Europe & Africa at ContourGlobal – and newly elected as a member of SolarPower Europe’s board of directors – reiterated this. Entering the UK with the Wallace project, Zorzoli notes, strengthens the company’s overall European footprint and that it ‘reflects our confidence in the country’s regulatory framework, market liquidity, and long-term fundamentals for battery storage.’

ContourGlobal sees Wallace as ‘well-positioned’ to capture value through the UK’s Balancing Mechanism in particular, a continuously open online auction with 30-minute trading periods which serve as the National Energy System Operator’s (NESO) primary tool to balance supply and demand on Britain’s network. “The UK combines regulatory clarity with a highly sophisticated power market,” says Zorzoli. “Mechanisms such as the Capacity Market and the Balancing Mechanism enable storage assets to access multiple revenue streams, combining contracted and merchant opportunities in a way that supports project bankability.

“More broadly across Europe, policymakers and system operators increasingly recognise storage as essential infrastructure for integrating growing volumes of renewable generation, improving grid flexibility, and strengthening energy security,” Zorzoli adds.

FlexGen, meanwhile, announced it was building out its presence in Europe to increase battery storage capacity on local grids, supporting energy reliability and affordability. The company’s energy management system (EMS), HybridOS software, aims to maximise site performance, reduce downtime, and extend the lifespan of energy storage assets. FlexGen noted it had projects across the UK, Finland, Sweden and Portugal, and was focused on building local teams of experts, employing staff across several European countries, including the UK and Ireland.

Leading this initiative is Mike Wallace, managing director, Europe at FlexGen. Wallace tells Electrical Insight that these projects are aimed at boosting availability, reducing risk, and improving asset management through both software and service offerings. “We’re also progressing through various certifications and testing for all of the European grid codes, [such as] UL testing VDE Prototype Certification in Germany, to strengthen our offering in different markets across the continent,” he adds.

Looking through a wider European lens, the European Union is taking a lead with its first tripartite agreement on energy storage. The agreement, signed in June, brings together the European Commission, financial institutions such as the European Investment Bank, energy ministers, as well as storage and renewable developers. The goal, as agreed by 22 member states, is to deliver 30 to 35 GW of new storage capacity by 2028. Patrick Clerens, secretary general of Energy Storage Europe, called it the ‘most comprehensive political recognition of energy storage at EU level to date’.

Putting batteries at the ‘heart of plans to capture more solar and wind power’, in the words of a Euronews article covering the agreement, therefore has a thumbs-up from industry. “As renewable penetration increases, storage becomes indispensable for maximising the value of solar and wind generation and reducing curtailment,” explains Zorzoli. “Batteries help absorb excess renewable production, shift energy to periods of higher demand, manage intraday price volatility, and reduce reliance on fossil fuel-peaking generation.

“In that sense, storage is not simply supporting the energy transition; it is enabling it by making power systems more flexible, resilient, and efficient.”

Wallace describes batteries as ‘critical’ to the EU’s strategy for reasons of grid stability and maintaining reliable electricity supply, citing the 2025 Iberian Peninsula blackout as something which could have potentially been prevented or mitigated by storing excess energy and responding to drops in frequency on a sub-second time scale.

Yet there is a caveat. “Batteries can also stabilise energy prices, especially during historic heatwaves where major daily pricing swings have become common,” says Wallace. “However, for BESS to play a meaningful role in stabilising grids and energy pricing, it needs to scale at the same pace as the buildout of solar and wind power generation assets.

“We have not seen battery deployment match the scale of deployment of wind and solar yet in Europe,” Wallace adds.

Solving grid access, however, remains a major factor – and is another way in which industry needs to get up to speed. “Grid connections and permitting remain the biggest bottleneck,” says Zorzoli. “Across many European markets, connection queues and permitting processes have not kept pace with the speed at which storage and renewable projects are being developed.”

Different countries are taking different approaches. In Germany, for instance, they are looking to solve this in part through Reifegradverfahren, which means ‘maturity level process’. Under this procedure, Aurora noted, a structured approach to assessing project readiness would be used.

In the UK, part of NESO’s connections reform is through classifying projects as Gate 1 or Gate 2. Gate 2 status – of which ContourGlobal’s Wallace site has been allocated – means demonstrating high project readiness, such as secured land rights, and strategic alignment, such as with the Clean Power 2030 action plan. Gate 2, Zorzoli added, is among reforms which ‘are helping improve predictability and prioritisation, but accelerating grid access will be critical to unlocking the next phase of renewable and storage deployment.’

“The rise in energy consumption, grid constraints, and data centre power needs across Europe have created a significant challenge for the intermittency of renewables and grid stability,” says Wallace. “Battery energy storage systems are best positioned to address this challenge. They are also the key to addressing a number of other factors impacting the European energy landscape today, such as pricing instability due to geopolitics and the growth of data centres across the continent.”

From FlexGen’s perspective, its automated EMS commissioning process aims to help developers get to commercial operation date faster; and the company leans on its experience in integrating more than 80 combinations of tier 1 OEM and power conversion systems (PCS) technologies in mitigating implementation risk.

“Time-to-power and system availability are critical to meet this rising demand in Europe and handle quickly shifting power loads,” says Wallace. “Developers need faster deployment, high system availability, and more complete solutions across battery storage and solar to ensure secure, reliable, and affordable energy.”

Looking at data centre use cases in particular, Wallace sees time-to-power and interconnection as one of the four challenges of data centres that batteries are ‘uniquely positioned’ to solve, alongside AI transient loads and power quality, multi-asset orchestration, and UPS constraints and power density. FlexGen concentrated heavily in 2025 on solving the speed to power and grid interconnection challenges for high-demand facilities such as AI data centres, and is now focusing on solving power challenges which come with quickly shifting loads.

“In our view, data centres and batteries go hand in hand,” says Wallace. “Data centre use cases have evolved, which has significantly shifted power needs. The scale of AI computing workloads means traditional grid infrastructure is lagging. Batteries can be a valuable option for data centres because they provide flexibility and reliability without costly infrastructure upgrades.

“We would also expect to see similar considerations in Europe eventually around data centres being good citizens of the grid, in the same way that ERCOT in the US recently passed policies requiring voltage ride-through, frequency ride-through and no more than 10 megawatts of voltage variation within five seconds,” Wallace adds.

Zorzoli argues that the growth of AI-driven data centres will ‘undoubtedly’ increase electricity demand, creating a ‘strong need’ for reliable, flexible, and increasingly clean power supplies.

“At the same time, broader electrification trends across industry, transport, and buildings will also drive demand,” Zorzoli adds. “On the supply side, Europe will continue adding significant volumes of renewable generation, creating an even greater need for storage to balance the system and shift clean electricity to when it is needed most.

“The rapid improvement in battery technology and the continued decline in storage costs are making increasingly sophisticated business models commercially viable.”

The landscape in Europe is therefore rapidly changing, which brings about opportunities and challenges in equal measure. But where can the next big developments be found? “Falling lithium-ion cell costs and continued improvements in flow battery economics are good news for our industry,” says Wallace. “While flow batteries haven’t achieved the standardised supply chain or lower cost of lithium-ion batteries, they can still provide value over longer durations, cycling patterns, and project life when leveraged at a commercially meaningful scale.”

ContourGlobal, meanwhile, says it is ‘actively investing and innovating’ in achieving reliable round-the-clock power supply, expecting 24/7 reliability to become a commercial reality before the end of the decade. “We believe the next major step for the sector will be the development of round-the-clock renewable power solutions, where renewables and storage work together to deliver reliable, clean electricity for many hours of the day and, ultimately, 24/7,” says Zorzoli.

Picture credit: Designed by Magnific

Editor’s note: This article initially appeared in the first issue of The Grid, powered by Electrical Insight. Read the full magazine here.