The recent successes of the energy storage market in Europe bring new challenges alongside industry maturity, writes Vicente Abad.
Europe’s energy storage market has crossed a threshold, reshaping how deals get done. Installed capacity across the EU, the UK and neighbouring markets now exceeds 100GW, with pumped hydro still accounting for the largest share.
In 2025 alone, battery installations grew by roughly 45% year-on-year across Europe, and total installed storage capacity is projected to move beyond 215GW before the end of the decade, according to LCP Delta. The trajectory is clear: storage is no longer an emerging segment — it is becoming core system infrastructure.
In a growth story of that magnitude, it would be reasonable to assume sourcing should be straightforward.
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Yet many investors and acquirers report the opposite: while more storage projects are formally ‘in market’ than ever before, genuinely investable, transaction-ready opportunities are becoming harder to secure. As markets professionalise and underwriting tightens, the investable subset narrows.
Scale does not mean simplicity — it increases differentiation
Storage is expanding across multiple configurations: standalone battery energy storage systems (BESS), co-located and hybrid projects combining storage with solar or wind, and increasingly load-led applications shaped by electrification and data centre demand. While this diversification reflects market maturity, it also reduces comparability between assets.
Two projects with identical nameplate power and duration can carry materially different value depending on grid queue position, reinforcement requirements, local constraint exposure, permitting maturity and—critically—the realism of energisation timelines. Installed capacity alone no longer captures execution risk.
Grid connection has therefore shifted from a late-stage diligence item to an early valuation filter in project transactions. In constrained nodes, connection status is not simply a milestone; it defines bankability and transaction certainty. Where queue rules tighten and re-ranking mechanisms apply, ‘paper projects’ and ‘deliverable projects’ diverge sharply in pricing outcomes.
Battery-heavy markets are already illustrating this shift. Germany, for example, is facing grid bottlenecks and high volumes of connection applications, reinforcing how execution readiness directly influences project value. Across Europe, transaction risk — not just scale — has become a primary differentiator.
Revenue is still there — but underwriting now starts with downside
Energy storage’s revenue story is maturing. Markets are no longer underwritten on a single, stable line item. Buyers increasingly require proof that the revenue stack can survive stress: shifting volatility patterns, greater renewable penetration, congestion and basis effects, curtailment mechanics, evolving imbalance structures and the implementation of 15-minute imbalance settlement across European markets.
As renewables scale, intraday behaviour and constraint-driven volatility can create opportunity, but they also introduce a sharper dependence on node-level exposure and operational strategy. The move to a 15-minute granularity makes short-duration price volatility more visible and increases the importance of dispatch precision.
During due diligence, the conversation has moved away from headline upside toward resilience: how robust is dispatch modelling, what assumptions drive performance under stress, and how does the project behave operationally when the grid is constrained?
That shift is one of the hidden reasons project transactions feel ‘harder.’ It is not that returns have disappeared; it is that buyers are paying for resilience and evidence. More projects fall out earlier in screening because their revenue narrative cannot be validated with sufficient confidence.
Supply chain volatility and CAPEX exposure
Battery supply chains have experienced renewed volatility. While lithium prices rebounded after mid-2025, other inputs such as electrolyte components and copper have also fluctuated, affecting system costs.
Although raw materials represent a limited share of turnkey BESS costs, index-linked procurement structures can transmit some of that volatility into system pricing, typically resulting in single-digit to low double-digit adjustments, depending on the contract structure.
Policy changes in China are adding another layer of uncertainty. The export VAT rebate on battery-related products is being reduced from 9% to 6% in 2026 before being phased out entirely in 2027.
While long-term economics remain intact, short-term cost timing can influence final investment decisions (FIDs) and transaction pricing discussions.
Why ‘good’ storage projects are harder to buy in 2026
Put these threads together, and the M&A bottleneck becomes apparent. Europe does not lack opportunities; it lacks opportunities that are consistently packaged, comparable, and investment-ready. Too many processes still start with incomplete milestone visibility, inconsistent documentation, unclear grid and reinforcement exposure, or revenue models that read like marketing rather than underwriting.
In 2026, buyers are trying to run faster—and paradoxically, they are saying “no” more often, earlier. The result is an environment where origination is busy, but conversion is harder.
The execution response: digital M&A platforms as infrastructure
This is where the market is quietly evolving. As screening moves upstream, digital platforms are becoming part of the execution toolkit—not as a replacement for developers, advisors, or bilateral relationships, but as infrastructure that reduces ambiguity earlier and lowers transaction friction.
At their best, platforms such as Nrdeal standardise how projects are presented, introduce a consistent milestone language, and support a cleaner diligence trail. That makes it easier for buyers to compare like-for-like and filter for delivery credibility before spending weeks on deep diligence.
The value proposition of platforms such as Nrdeal for renewable assets — or LevelTen Energy for PPAs — lies in connecting sellers and buyers through a structured, pre-screened environment and encouraging a more investment-ready presentation.
In an energy storage market where value increasingly depends on documentation quality, milestone clarity and execution credibility, this kind of structure can turn fragmented opportunity flow into a more comparable pipeline and help high-quality projects stand out for the right reasons.
As Europe moves toward more than 215GW of installed storage by 2030, order and execution discipline are becoming competitive advantages. The scarce asset is no longer megawatts, but credible delivery — evidenced early, structured clearly and able to withstand diligence — as execution certainty becomes embedded in valuation and increasingly determines how growth converts into closed deals.
About the Author
Vicente Abad has over 15 years’ experience in solar and energy storage, across engineering, product and strategic procurement roles in global utility-scale projects. He focuses on project value creation, commercial structuring and execution discipline in renewable energy markets.