Here are some of the most impactful projects and policy initiatives:
1. Horizon Europe and Horizon 2020 Projects
Under the EU’s flagship research programs, Horizon Europe and Horizon 2020, numerous energy storage projects are being funded to develop innovative, scalable storage solutions. Projects focus on advancing battery technology, hydrogen storage, and grid-scale storage applications, enhancing renewables’ reliability and cost-efficiency. Some notable examples include:
- BIG-MAP: Aims to develop next-generation lithium-ion batteries and alternative materials for storage applications. It is part of the Battery 2030+ initiative (see below).
- HYBRIT: Focuses on hydrogen storage and its application in reducing industrial carbon emissions.
2. Battery 2030+ Initiative
Battery 2030+ is a long-term European research initiative aimed at making Europe a leader in advanced battery technology. It seeks to develop high-performance, sustainable, and safe battery solutions for both renewable energy storage and electric vehicles, supporting the EU’s climate and industrial competitiveness goals.
3. European Battery Alliance (EBA)
Launched by the European Commission, the EBA is a collaborative network of over 500 actors in the battery supply chain working to establish a complete and sustainable battery ecosystem in Europe. This initiative supports the scaling up of battery production and innovation to meet growing demand for energy storage and contribute to the EU’s energy independence.
4. Innovation Fund and Energy Transition Fund
The Innovation Fund (one of the world’s largest funding programs for low-carbon technologies) and the LIFE Clean Energy Transition sub-programme provide financial support for large-scale energy storage projects that can significantly reduce emissions. They back projects in areas like battery storage, hydrogen technologies, and pumped hydro storage, all critical for renewable energy integration.
5. Trans-European Networks for Energy (TEN-E) and Projects of Common Interest (PCI)
The TEN-E regulation and the Projects of Common Interest framework prioritise cross-border energy infrastructure, including energy storage projects that benefit multiple EU countries. These projects receive fast-tracked permitting, regulatory support, and access to EU funding, supporting a more resilient, integrated energy market. In this context, every two years the EC draws up a list of EU PCIs which may apply for Connecting Europe Facility (CEF) funding. Examples of PCI project include large-scale battery storage installations and pumped hydro projects. Additionally, energy storage facilities can be in individual or aggregated form, used for storing energy on a permanent or temporary basis, in aboveground or underground infrastructure or geological sites, provided they are directly connected to high-voltage transmission lines and distribution lines designed for a voltage of 110 kV or more.
6. European Clean Hydrogen Alliance
Hydrogen is considered a game-changer for energy storage, particularly for sectors requiring long-term storage solutions. The European Clean Hydrogen Alliance focuses on scaling up hydrogen production, storage, and infrastructure. This alliance aligns with the EU’s ambition to make hydrogen an essential part of its clean energy mix, supporting green hydrogen production and storage for industrial applications and power generation.
7. Battery Passport Initiative
To promote sustainability in the battery industry, the Battery Passport is a digital tool being developed under the Battery Regulation. It tracks batteries’ environmental footprint, composition, and lifecycle, fostering transparency and accountability. This initiative supports the EU’s efforts to establish a circular battery economy, benefiting renewable energy storage by promoting more sustainable, long-lasting batteries.
8. Smart Grid and Digitalization Projects
The EU is investing in smart grid projects to ensure smooth integration of energy storage with renewables. Through digitalization initiatives funded by programs like Horizon Europe, the EU is building grids that efficiently balance renewable energy, storage, and distributed energy resources (DERs). These smart grids enhance grid flexibility, supporting energy management in real-time and facilitating storage’s role in renewable energy balancing.
Market Design and Sector Integration are two key areas within the EU's energy policy framework, designed to create a more interconnected, flexible, and resilient energy system that can effectively integrate renewable energy sources and support the EU’s clean energy transition.
1. Market Design
The EU’s Electricity Market Design focuses on restructuring energy markets to accommodate the unique characteristics of renewable energy, enhance flexibility, and ensure fair competition. The EU’s market design reforms aim to:
Promote Renewable Energy and Flexibility: Traditional market structures were built around large, centralized fossil fuel power plants. However, renewable energy sources are more decentralized and variable, so the EU’s market design encourages the inclusion of flexible resources like energy storage, demand response, and distributed energy resources (DERs). By allowing storage to participate in electricity markets and offer balancing services, the design supports renewables' integration and reliability.
Facilitate Short-Term and Cross-Border Trading: The EU promotes day-ahead, intraday, and balancing markets that allow for short-term energy trading across borders. This short-term flexibility is critical for renewables, as it enables producers and consumers to respond quickly to changes in supply and demand, while cross-border trading enhances energy security and reduces costs by using resources more efficiently across member states.
Capacity Markets and Ancillary Services: Capacity markets provide incentives for backup capacity, ensuring the grid remains stable even during peak demand or low renewable output. Ancillary services, which include frequency and voltage regulation, can also be provided by energy storage and other flexible assets. These services help stabilize the grid, crucial as renewables and storage take on larger roles in the energy mix.
2. Sector Integration
Sector Integration, or Energy System Integration, is the EU’s approach to creating a holistic energy ecosystem by interconnecting different energy sectors — electricity, heating and cooling, gas, and transport — to increase efficiency, sustainability, and flexibility. By linking these sectors, the EU can maximize renewable energy use across the entire energy system, balancing demand and supply more effectively. Here’s how:
Electrification of Sectors: One of the main strategies of sector integration is electrifying traditionally fossil-fuel-based sectors, such as transport (through electric vehicles) and heating (through heat pumps). This approach increases the demand for renewable electricity, helping absorb excess generation and reduce reliance on fossil fuels.
Renewable and Low-Carbon Gases: Sector integration emphasizes the role of renewable gases, like green hydrogen, as energy storage solutions and versatile fuels. For example, when excess renewable energy is generated, it can be converted into hydrogen and stored for use in various applications, such as industrial heating, power generation, and as a transportation fuel.
Smart and Flexible Infrastructure: Sector integration requires digitalized, smart infrastructure that can coordinate energy flows between sectors. The EU is investing in smart grids and digital platforms that enable real-time monitoring, control, and optimization of energy across electricity, heat, and gas networks. This integration allows energy generated in one sector (like electricity from solar) to be stored and used across other sectors (like hydrogen for industrial use or heating).
Energy Efficiency and Circularity: A core principle of sector integration is enhancing energy efficiency and promoting circular economy practices. By linking sectors, waste energy from one area can be repurposed in another, such as using excess heat from industrial processes to heat buildings. This reduces energy waste, decreases emissions, and optimizes resource use.
Supporting EU Clean Energy Goals
Together, Market Design and Sector Integration are central to achieving the EU’s clean energy goals. Market Design reforms enable renewable and flexible resources, like storage, to actively participate and stabilize the market, while Sector Integration allows different sectors to work together to efficiently use renewables across the economy. This interconnected approach not only supports the EU’s targets for renewable energy and emissions reduction but also enhances energy security, resilience, and independence across the entire European energy system.
The EU energy storage market has grown rapidly in recent years and is projected to continue expanding as the demand for renewable energy integration, grid stability, and energy independence rises. According to Statista, the market size of energy storage systems in Europe is forecast to grow by 30 billion U.S. dollars (approx €28,5 billion) between 2023 and 2031. This expansion is being fueled by multiple EU initiatives, including the European Green Deal, REPowerEU, and investments under Horizon Europe, which collectively aim to support the deployment of large-scale storage solutions.
Battery Storage Market: The battery storage market is particularly dynamic, with increasing demand for lithium-ion batteries driven by both renewable energy storage and electric vehicles. By 2030, the European battery storage market is expected to grow substantially, thanks to investments from the European Battery Alliance (EBA) and large-scale manufacturing facilities being established across Europe.
Hydrogen Storage Market: Hydrogen storage is also emerging as a critical component in the EU’s energy transition strategy. As green hydrogen production ramps up, the EU has seen a notable increase in pilot projects and investments in hydrogen storage facilities, including underground storage for long-term energy needs.
Pumped Hydro Storage: The largest and most mature form of energy storage in Europe remains pumped hydro storage (PHS), accounting for the bulk of installed capacity. While the growth rate for new PHS projects is slower due to high costs and location limitations, existing facilities are increasingly utilized to support renewable integration.
The installed energy storage capacity in the EU has been on an upward trajectory, supported by both grid-scale and decentralized installations. Here’s a breakdown of some of the leading storage technologies:
Battery Storage Capacity: Battery storage capacity in the EU has seen rapid growth, with more than 10 GW installed as of recent years. As of 2024, the market continues to expand, especially in countries with high renewable energy penetration, like Germany, Spain, and the Netherlands. These batteries play a key role in balancing short-term fluctuations in solar and wind generation, stabilizing the grid, and enabling self-consumption.
Pumped Hydro Storage (PHS): The EU’s pumped hydro storage capacity is approximately 45-50 GW, making it the largest contributor to grid stability. PHS facilities in countries like Austria, Spain, France, and Italy continue to provide large-scale, long-duration storage solutions essential for managing seasonal renewable energy variations.
Hydrogen Storage Capacity: Although still in the early stages, hydrogen storage capacity is growing as pilot projects scale up. The EU is expected to reach gigawatt-scale hydrogen storage capacity by 2030, driven by green hydrogen projects in Germany, the Netherlands, and Spain, where it can be used both as a fuel and as a long-term energy storage solution.
The EU’s storage market is expected to keep its upward trajectory with substantial investments in grid-scale batteries, hydrogen storage infrastructure, and innovative storage technologies, like thermal and compressed air. The European Investment Bank (EIB) and private investments continue to support storage projects across the EU, aligning with the EU’s 2030 climate and energy targets.
Key Drivers for Growth
Renewable Integration: As wind and solar capacity increase, storage will be crucial to balancing their variability.
EU Policies and Funding: Initiatives like REPowerEU, the European Green Deal, and Horizon Europe provide funding and regulatory support, incentivizing the deployment of storage solutions.
Technological Advancements: Advancements in battery technologies, green hydrogen production, and smart grid systems are making storage more cost-effective and accessible.
Energy Security and Independence: The need for resilient, independent energy systems has led to renewed emphasis on local storage capacity as a buffer against external energy supply shocks.