Capacity installations of renewable energy co-located with batteries for storage are expected to surge in Europe from 6 gigawatts in 2025 to as much as 35 GW by 2030, a new report by Aurora Energy Research showed on Monday.
The research examined developments in 20 European markets in terms of attractiveness for co-location, and identified Germany, Great Britain, and Bulgaria as Europe’s most attractive co-location investment markets.
Germany is the most attractive co-location market, thanks to its sheer size and significant upside potential for investment returns, according to Aurora Energy Research.
Britain and Bulgaria share the second place as most attractive markets to develop solar or wind plus battery projects. Great Britain benefits from substantial installed capacity and a pipeline of projects backed by contracts for difference that would help offset grid connection delays. Bulgaria, for its part, combines strong subsidies, a robust pipeline, and favorable economics, analysts at Aurora Energy Research said.
“Co-location is no longer a niche solution: it is increasingly critical to protecting project economics and sustaining investment momentum,” said Sameer Hussain, Research Senior Analyst at Aurora Energy Research.
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“As renewable penetration accelerates, grid congestion, curtailment and price volatility are becoming defining features of Europe’s power markets,” the analyst said.
The investment drive behind co-location of renewable-plus-storage projects differs across Europe, commented Jörn Richstein, Research Lead, Pan European Power Markets, Policies & Technologies, at Aurora Energy Research.
“In some markets it is driven by merchant upside, in others by subsidy-supported stability, and elsewhere by the need to overcome grid constraints and limit curtailment,” Richstein said.
Curtailment, the process of curbing renewables output to protect the grid in case of oversupply, is expected to more than triple from over 10 TWh in 2024 to around 33 TWh by 2030 across key markets, according to Aurora Energy Research.
“Co-located storage helps mitigate these risks by shifting generation, reducing curtailment and improving capture prices as highlighted by Aurora,” the analysts said.
By Michael Kern for Oilprice.com
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