Greece, Bulgaria offer best returns on battery investments in Europe

Investments in battery storage offer the opportunity for profitable energy arbitrage and the best potential profits in Europe are in Greece and Bulgaria, according to Rystad Energy.

Battery operators can store energy when power prices are low and sell it and deliver it to the grid when they are higher.

Usually, hours with low prices are around noon, when photovoltaics reach maximum production. They peak in the afternoon as solar production drops and demand increases.

According to a new report by Rystad Energy titled ‘Energy transition impact on the European Power Sector’, Greece and Bulgaria offered the best opportunities for such arbitrage in 2023.

Profits of up to EUR 170 per MWh are possible in Bulgaria

Namely, when it comes to the difference between the spot market cost of energy and spot market revenue, Greece, Bulgaria and northern Italy occupy the top spots. Croatia and Slovenia also scored high, in fifth and seventh place, respectively, among the 26 markets. Montenegro is fourth from last, but still profitable for storage investors.

The data in the whitepaper were calculated for an average system with a two-hour storage duration.

“Based on 2023 day-ahead hourly auctions in European power markets, our analysis shows that Bulgaria’s power market offers the most opportunity for high revenues, with a battery storage system with two hours of discharge capacity using energy arbitrage to generate a maximum EUR 170 per MWh per year in terms of average spot market revenue,” Rystad said.

Similarly, Bulgaria had the highest difference between the spot market profit and system cost. It is calculated by deducting the spot market charging cost from spot market revenue.

Greece and Croatia are above average, fifth and eighth, respectively, out of 26. In comparison, Slovenia is 12th and Montenegro landed at position 16. Only four markets are below the profitability threshold: Poland, Switzerland, Norway’s NO1 bidding zone and Sweden’s SE1 region.

It should be noted that Bulgaria retained its top ranking from Rystad’s previous report.

New projects with batteries in Greece

It should be noted that earlier this month 11 projects were selected at Greece’s second energy storage auction, with 300 MW in total operating power.

It is no surprise that investing interest remains high given the attractiveness of such projects.

During the February energy storage licensing cycle, the Regulatory Authority for Waste, Energy and Water (RAWEW) received 30  applications for a total of 2.1 GW. Most were for battery systems while three projects were for pumped storage hydropower.