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POWER: Rising Power Price Spreads May Support Battery Buildout

POWER
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This year’s rising power price spreads, largely due to higher solar generation, can drive the battery buildout in parts of Europe according to BNEF. 

  • Prive volatility alone is sufficient for developers to boost the buildout of battery capacity in markets such as Hungary and Romania but no sufficient in most other European markets.
  • Lower battery prices are also improving the viability of arbitrage-based battery projects, with a two-hour battery built in 2-24 needing an average daily spread of €114/MWh over its lifetime to meet investor targets, compared with €150/MWh last year.
  • Currently, frequency response provides most revenues for projects, but prices are likely to decline due to an expected oversupply.
  • EU utility-scale battery additions stood at 2.6GW in 2023 and are anticipated to rise to 14GW by 2030. 
     
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This year’s rising power price spreads, largely due to higher solar generation, can drive the battery buildout in parts of Europe according to BNEF. 

  • Prive volatility alone is sufficient for developers to boost the buildout of battery capacity in markets such as Hungary and Romania but no sufficient in most other European markets.
  • Lower battery prices are also improving the viability of arbitrage-based battery projects, with a two-hour battery built in 2-24 needing an average daily spread of €114/MWh over its lifetime to meet investor targets, compared with €150/MWh last year.
  • Currently, frequency response provides most revenues for projects, but prices are likely to decline due to an expected oversupply.
  • EU utility-scale battery additions stood at 2.6GW in 2023 and are anticipated to rise to 14GW by 2030.