Europe’s energy storage remains underused despite rapid growth. Here’s where policy, AI, and smart project design can turn that gap into a major opportunity.
Most of Europe’s power system could already be cleaner, cheaper, and more reliable than it is today—and the missing ingredient isn’t new wind farms or more solar panels. It’s energy storage that’s sitting on the sidelines.
A fresh assessment for the EU Joint Research Centre (JRC) puts Europe’s storage pipeline at 170.9 GW across 2,356 projects. Only about 70 GW is actually operating. Another 97.3 GW might be online by 2030. The rest? Stuck in permitting, policy limbo, or business cases that don’t quite stack—yet.
This matters because energy storage is the glue that holds a high-renewables power system together. For anyone working in green technology, smart grids, or clean energy investment, understanding why storage is “significantly underutilised” and where the real opportunities sit is a competitive advantage.
In this article, I’ll unpack what the JRC report tells us, why storage deployment is lagging behind its potential, how AI and digital tools can fix that gap, and what businesses and project developers can do right now to position themselves for the next wave of growth.
Where Europe Stands on Energy Storage Today
Europe already has a substantial base of energy storage, but most of the value is still untapped.
According to the JRC’s “Overview of Energy Storage Deployment in Europe”:
- Total identified capacity: 170.92 GW across Europe
- Operational: ~70 GW
- Expected by 2030: +97.26 GW
- Technologies covered: pumped hydro, battery energy storage systems (BESS), and other mechanical and electrochemical options
A separate market monitor from LCP Delta and Energy Storage Europe puts installed capacity even higher, at around 100 GW deployed by late 2025, with the 100 GW threshold expected to be crossed by the end of November.
The exact numbers differ because of methodology, but the trend is crystal clear:
Europe has moved from “pilot-scale curiosity” to large-scale deployment, yet not nearly fast enough to match renewable growth.
Why that’s a problem for the energy transition
Solar and wind are ramping up faster than grids were designed to handle. Without enough flexibility, you get:
- Curtailment of renewables when there’s excess generation
- Price volatility and negative prices during high-output periods
- Stress on transmission and distribution (T&D) networks
- Higher peak prices for consumers and businesses
Storage is the tool that smooths those spikes—physically and economically. The frustrating part? The technology is ready. Costs are falling. A policy framework exists. And yet, the JRC is still comfortable using the phrase “significantly underutilised.”
So what’s holding it back?
What’s Blocking Energy Storage from Reaching Its Potential?
The JRC report is pretty blunt: gaps in implementation, market access, and investment incentives are slowing the rollout.
Policy support is there on paper—but patchy in practice
Across the EU:
- 6 countries have explicit energy storage targets in their National Energy and Climate Plans (NECPs)
- 17 countries have storage-specific policies (but no binding targets)
That’s progress, but it creates a fragmented market:
- Developers face different rules, revenue models, and risk profiles in each country
- Grid operators aren’t always required to plan for flexibility properly
- Project pipelines can stall between “announced” and “built” because of unclear monetisation
The EU has started to push more concrete frameworks, especially via Electricity Market Design (EMD) reforms and the EU Battery Regulation, but these are still bedding in.
Market design still undervalues flexibility
Storage can deliver multiple services at once:
- Frequency response and ancillary services
- Peak shaving and capacity support
- Congestion management in T&D networks
- Energy arbitrage between low-price and high-price hours
In theory, that’s a goldmine. In practice, many markets still:
- Treat storage as a single-purpose asset
- Block “stacked” revenue streams
- Lock energy storage out of capacity mechanisms
That makes business cases fragile, even when the technology is solid.
Investment signals haven’t caught up with falling costs
One of the quiet success stories in green technology is the cost trajectory of lithium iron phosphate (LFP) batteries.
The JRC quotes S&P data showing:
- 37% capex decline for LFP between 2022 and 2025
- In Germany, LFP capex fell from ~€300/kWh in 2022 to ~€200/kWh in 2025
So you’ve got:
- Cheaper, safer, long-life batteries
- High renewable penetration in major markets
- Policy frameworks starting to recognise storage as critical infrastructure
And still, too many projects are in “wait and see” mode. That’s not a technology issue. It’s a coordination and design problem.
Two EU Policy Shifts That Will Change the Storage Business
If you’re planning to build, finance, or operate energy storage in Europe over the next five years, two EU-level moves matter more than anything else.
1. Flexibility assessments for grid operators
Transmission and distribution system operators (TSOs and DSOs) will now be required to assess flexibility needs under a new EU methodology. Practically, that means:
- Flexibility—provided by assets like BESS, EV charging, and demand response—must be considered in long-term grid planning
- Storage stops being an afterthought and starts becoming a strategic planning tool
As Eaton’s Siobahn Meikle puts it, flexibility is all about helping system operators “manage energy flows and maintain stability,” with technologies that can ramp up or down rapidly based on price and system conditions.
Why this matters for the market:
- More visibility on where flexibility is needed (locations, capacities, timings)
- Clearer revenue opportunities for local and regional storage projects
- Stronger rationale for regulators to approve storage-friendly tariffs and mechanisms
Frankly, this is where AI can shine: using grid data, weather forecasts, and market prices to identify flexibility gaps and size storage projects with far better accuracy than manual methods.
2. The EU Battery Regulation
The EU Battery Regulation is already reshaping how storage projects are designed and procured. Key angles include:
- Mandatory CE marking for battery products (in effect since August 2025)
- Tougher requirements on safety, performance, and durability
- Deepening rules on supply chain traceability and transparency
For developers and integrators, this means:
- Fewer “black box” battery systems
- More standardisation and reduced technical risk
- A premium on partners who can prove compliance and traceability
For sustainability-focused companies, this regulation is actually an asset. It pushes the industry towards:
- Lower embodied emissions per kWh of storage
- Better recycling and second-life pathways
- Stronger ESG credentials for storage portfolios
In the broader green technology context, this is where AI is already used to track materials, verify supply chains, and optimise recycling flows—turning regulatory pressure into competitive advantage.
How AI and Digital Tools Can Unlock Europe’s Storage Potential
The reality? Technology isn’t the bottleneck anymore. Integration is.
This is where AI, advanced analytics, and automation can turn “significantly underutilised” into “fully optimised” over the next few years.
Smarter project siting and sizing
Using AI on top of datasets like the European Energy Storage Inventory, TSOs’ flexibility assessments, and market price histories, you can:
- Identify high-value grid nodes that need flexibility support
- Size projects based on realistic, data-driven revenue stacking
- Stress-test business cases under dozens of price and policy scenarios
This shifts storage from speculative plays to targeted infrastructure investments, which is exactly what investors want to see in 2026 and beyond.
Advanced energy management and optimisation
Once a BESS is built, its profitability depends on how well it’s operated. AI-powered energy management systems (EMS) can:
- Forecast prices and dispatch storage into the most lucrative markets
- Balance between arbitrage, grid services, and congestion relief
- Learn from past performance to refine strategies continuously
For industrials, data centres, and large C&I customers, this is especially valuable. Pairing on-site solar, storage, and smart controls often:
- Cuts peak demand charges
- Provides resilience against outages
- Lowers the carbon intensity of operations
In practical terms: you don’t just buy a battery; you buy a software-defined flexibility asset.
Better forecasting for renewables and demand
Storage value depends on mismatch between supply and demand. AI can sharpen both sides:
- Higher-accuracy PV and wind forecasts reduce unnecessary curtailment
- Demand forecasting allows storage to charge/discharge at optimal times
- DSOs and TSOs can plan around congestion instead of reacting to it
This is a core theme across the Green Technology series: AI isn’t just an add-on. It’s what makes complex, distributed, clean energy systems actually workable at scale.
Where the Real Opportunities Are for Businesses and Developers
If you’re developing, investing in, or adopting green technology, energy storage in Europe is moving from “interesting” to “essential.” Here’s where I’d focus over the next 2–5 years.
1. Flexibility-aligned storage projects
Start from the grid’s needs, not from hardware.
- Use flexibility assessments and grid studies to pick locations
- Build projects that can stack services: frequency, capacity, congestion, and arbitrage
- Design contracts and EMS setups that allow you to pivot as markets evolve
2. Storage + solar and wind portfolios
Standalone storage has a role, but co-located storage with PV or wind has strong advantages:
- Shared grid connection points
- Reduced curtailment and more predictable revenue
- Stronger alignment with corporate decarbonisation goals
Developers that can bundle renewables + storage + AI optimisation will win more tenders and corporate PPAs.
3. C&I and microgrid solutions
For large commercial and industrial users, storage is increasingly a strategic asset:
- Smoothing exposure to volatile power markets
- Enabling participation in demand response and flexibility markets
- Supporting on-site renewables while keeping operations reliable
In many EU markets, combining battery storage with smart controls now pays back within a reasonable horizon—especially when you factor in avoided downtime and emissions.
4. Battery supply chains and compliance services
The EU Battery Regulation is creating a whole new ecosystem around:
- Compliance consulting
- Traceability platforms
- Lifecycle assessment and recycling
AI is a natural fit here: managing data across complex, global supply chains and turning compliance into auditable, automated workflows.
The Storage Gap Is Real—But So Is the Opportunity
Europe’s energy storage landscape is at an awkward in-between stage. The hard parts—like technology maturity and cost reductions—are largely solved. The remaining barriers are coordination, market design, and smarter use of data.
For companies working in green technology, that’s actually good news. Those are problems you can actively solve:
- Use AI and analytics to target the most valuable storage opportunities
- Build portfolios that combine renewables, storage, and digital optimisation
- Align your projects with upcoming flexibility assessments and battery rules
The JRC is right that energy storage is “significantly underutilised” in Europe. The question for the next few years is simple: who turns that underutilisation into competitive advantage first?
If your organisation wants to cut emissions, stabilise energy costs, or build the next wave of sustainable infrastructure, now is the time to treat storage—not just generation—as a core part of your strategy.