A European Market Design for Energy Storage

"Energy storage is the underestimated cornerstone of the energy transition," says André Wolf, cep energy expert and author of the study. "Without a targeted storage strategy, Europe risks remaining stuck in old ways of thinking and squandering the opportunities offered by new technologies."

Investment in storage solutions is currently hampered by regulatory hurdles and a lack of market incentives. Wolf therefore recommends a balanced mix of measures that includes both the removal of regulatory barriers and the introduction of innovative incentive systems. In addition to speeding up approval procedures and flexible grid connections, this includes greater integration of storage facilities into grid planning. The abolition of double taxation, harmonisation of market access rules and the promotion of long-term power purchase agreements (PPAs) will ensure fair competition.

To promote storage activity that benefits the system, a combination of storage-friendly capacity markets and price-related incentives – in particular a percentage surcharge on discharge prices – is particularly promising. The study shows that this approach is not only cost-effective, but also limits fiscal risks and enables the development of a diverse storage landscape in Europe. This would enable targeted support for young storage technologies with potential for long-term storage and new system services. "Europe now needs a coherent storage strategy that recognises the value of flexibility and diversity," says Wolf. "This is the only way to create a stable, CO₂-free energy system for the future."