The evolving role of long-duration storage in Europe’s power markets

This AFRY study, delivered for Eurelectric using BID3, explores how emerging storage technologies contribute to system flexibility in a high-renewables future. The analysis assesses market value, system benefits and regional opportunities across Europe to 2050.

Fundamental shifts taking place requiring more long-duration storage

The results highlight a fundamental shift in market dynamics as wind and solar capacity expands. BID3 modelling shows an increasing frequency of low and negative price periods, alongside growing requirements for balancing services and system flexibility. In this context, long-duration storage enables the system to shift energy across multiple timescales, supporting security of supply while reducing dependence on thermal generation.

Value of storage varies massively by market

The value of storage is shown to vary significantly by market structure. Wind-dominated systems such as Great Britain and Germany benefit from longer-duration technologies that can capture value during extended low-price events and provide backup during multi-day supply shortages. In contrast, solar-dominated systems such as Iberia favour medium-duration solutions, where strong and persistent within-day price spreads drive more frequent cycling.

Storage delivers substantial market and system benefits

Across all regions, BID3 results demonstrate that storage delivers both market and system benefits. These include reduced renewable curtailment, improved utilisation of low-cost generation and lower overall operating costs. However, future revenues are sensitive to evolving price volatility, competition from other flexibility sources and market design, highlighting the importance of appropriate policy frameworks to enable deployment at scale.

Selected findings from the analysis include:

• Each 1 GW of installed storage can deliver approximately €150m–€250m per year in variable cost savings to the system.
• The majority of storage revenues (typically ~70–80%) are derived from day-ahead energy market trading, with the remainder coming from intraday markets and system services.
• Iberia represents the most attractive market for 8–12 hour storage, driven by strong and persistent solar-driven price spreads.
• Great Britain and Germany become increasingly attractive for longer-duration storage (>24 hours) from 2040 onwards, as wind penetration drives extended low-price periods

Link to the Eurelectric page (external webpage) External link.