Storing electricity has always been part of the energy transition. The question is no longer whether Europe needs more storage – it is what kind of storage the system will need next.
For years, Europe’s flexibility conversation has centred on short-duration batteries, and for good reason. As solar and wind generation have expanded, batteries have become essential for balancing the grid, helping integrate more renewables and manage daily fluctuations in supply and demand.
But as Europe electrifies and renewable generation continues to grow, matching supply and demand becomes increasingly complex. Electricity demand does not always occur when renewable generation is available, and periods of surplus or scarcity can last far longer than a few hours.
Batteries and other forms of short-duration storage will remain a critical part of the flexibility toolkit, helping balance the system throughout the day. However, some challenges require energy to be stored and shifted over longer periods. This is where long-duration energy storage can play a complementary role, helping bridge gaps that shorter-duration solutions are not designed to address.
The result is a new study, LDES market overview: What is the outlook for innovative LDES in Europe? The findings suggest that the opportunity is real. Each gigawatt of long-duration energy storage could generate between €150 million and €250 million in annual system-wide operating cost savings, while reducing renewable curtailment, easing network congestion and strengthening security of supply.
This week’s #FridayFeature explores where the biggest opportunities lie, which technologies are emerging as frontrunners, and what will be needed to bring long-duration storage into the mainstream of Europe’s electricity transition.
Why Europe needs long-duration storage
For decades, Europe’s flexibility needs were largely met by conventional generation and pumped-storage hydropower.
However, large volumes of solar generation increasingly create midday electricity surpluses, while periods of low wind generation often referred to as Dunkelflaute (literally “dark wind lull”) can last several days. At the same time, electrification is driving new demand from heat pumps, electric vehicles and data centres.
These shifts create growing mismatches between when electricity is generated and when it is needed.
Short-duration batteries play an important role in balancing hourly fluctuations, but they cannot always address longer imbalances. This is where long-duration energy storage comes in.
The study defines LDES as storage technologies capable of delivering electricity for more than eight hours. These include solutions such as:
- Iron-air batteries
- Compressed air energy storage (CAES)
- Liquid air energy storage (LAES)
- Flow batteries
- Liquid CO₂ storage technologies (LCES)
Together, these technologies offer the ability to store renewable electricity over much longer periods and release it when the system needs it most.
The numbers behind the opportunity
The Eurelectric-AFRY analysis modelled five European markets – Germany, Great Britain, Portugal, Spain and Finland across three time horizons: 2030, 2040 and 2050.
The results reveal significant system-wide benefits.
According to the study:
- Each GW of LDES deployed could generate between €150 million and €250 million in annual variable operating cost savings
- Each MW of installed LDES could avoid approximately 1.3 to 2.5 MWh of renewable energy curtailment annually
- Great Britain alone may require 11.5-15.3 GW of long-duration storage to support its net-zero pathway
- The strongest benefits were observed in Spain and Portugal, where storage can help absorb abundant solar generation and reduce renewable curtailment
These benefits extend well beyond individual projects.
By storing excess renewable electricity and releasing it during periods of scarcity, LDES can reduce reliance on fossil generation, ease pressure on networks and improve overall system efficiency.
One Europe, different storage stories
A key finding of the report is that there is no single European storage model.
The optimal storage technology and duration depend heavily on local generation mixes and market conditions.
Germany and Great Britain: preparing for Dunkelflaute
In wind-dominated systems such as Germany and Great Britain, the biggest challenge comes from prolonged periods of low wind generation.
These markets show the strongest long-term potential for storage technologies capable of operating for more than 24 hours, particularly after 2040.
As thermal generation retires, these technologies could help maintain reliability during multi-day renewable shortfalls while reducing congestion and curtailment.
Spain and Portugal: making the most of the solar boom
The Iberian Peninsula tells a different story. With solar generation becoming increasingly dominant, medium-duration storage solutions of around eight to twelve hours are expected to deliver the greatest value.
These technologies can absorb surplus daytime solar generation and release it during evening peaks, helping smooth daily price fluctuations and improving renewable integration. The study also highlights growing opportunities for storage to support system services and strengthen solar power purchase agreements by making renewable generation more dispatchable.
Finland: a more challenging investment case
Finland presents a unique picture. Abundant hydropower generation already provides significant flexibility, reducing the price volatility that storage projects rely upon for revenue.
While LDES could play an important role as backup during winter periods of low wind generation and high demand, current market conditions make the merchant business case more challenging than elsewhere in Europe.
The economics are improving – but not fast enough
Perhaps the most important finding is that innovative storage technologies are steadily moving towards commercial viability.
Several technologies are expected to approach cost recovery in Germany and Great Britain from 2040 onwards, while Iberian markets already offer promising opportunities for medium-duration storage solutions.
However, revenues from today’s electricity markets are often insufficient to fully support investment.
High upfront capital costs remain a major challenge, while uncertainty around future revenues can make financing difficult.
As Kristian Ruby, Secretary General of Eurelectric, noted at the report launch:
“Europe’s energy transition needs technologies that can cover the increasing need for flexibility in the power system. It is encouraging that a business case is beginning to emerge for innovative long-duration energy storage with substantial system benefits: less curtailment, lower operating costs, reduced congestion and greater security of supply.”
What needs to happen next?
The report concludes that the technology challenge is increasingly being solved, however the policy and market challenge remains.
To accelerate deployment, Europe will need:
- Market frameworks that better reward flexibility through proper implementation of the EU Electricity Market Design
- Technology-neutral capacity mechanisms that recognise the value of long-duration storage
- Stronger incentives for congestion management and renewable integration
- Clear pathways for storage participation across energy, balancing and ancillary service markets
In many markets, the value created by LDES is spread across the wider system rather than captured by individual projects. Bridging this gap will be critical if deployment is to happen at the pace required.
A cornerstone of the future power system
Long-duration storage is unlikely to replace other flexibility solutions, instead, it will complement batteries, hydropower, demand response, interconnections and flexible consumption.
But as renewable generation continues to grow, the ability to shift electricity across longer timescales will become increasingly valuable. The Eurelectric-AFRY study suggests that Europe is approaching a turning point with the system’s benefits already becoming clear, the technologies advancing rapidly, and the business case emerging.
This week’s edition written by:
Erin Kalejs – Strategic Communications, Eurelectric
This blog post was originally published as part of Eurelectric’s LinkedIn Friday Features. Subscribe here to stay updated and never miss an edition.
Disclaimer: This article is for communication purposes only and may not reflect Eurelectric positions. Any positions taken in this article shall not be attributable to Eurelectric’s official positioning. Official Eurelectric positions are reflected only in position papers published here.