The report prepared by the Joint Research Centre (JRC) of the European Commission provides a comprehensive assessment of the development of energy storage policies, regulatory frameworks and market structures across the European Union. The study evaluates the implementation status of the European Commission Recommendation on Energy Storage (C/2023/1729) and analyses the readiness of Member States to support the deployment of energy storage technologies.

Context and role of energy storage

The European Union is committed to decarbonising its energy system and achieving the climate objectives established in the European Climate Law. The rapid expansion of renewable energy sources, particularly wind and solar power, increases variability in electricity generation and requires greater system flexibility. Energy storage technologies play a critical role in ensuring grid stability, balancing supply and demand, and enabling the large-scale integration of renewable energy.

According to the report, the share of renewable electricity in the EU is expected to grow from approximately 47% in 2024 to about 69% by 2030 and up to 80% by 2050. As a result, system flexibility needs are projected to increase significantly, reaching around 24% of total electricity demand by 2030 and approximately 30% by 2050. Energy storage technologies therefore represent a key component of the future European energy system.

At present, pumped hydro storage remains the dominant technology in the EU electricity system. However, the technological landscape is rapidly evolving, with battery storage projects expanding significantly and new technologies such as Power-to-Gas and hydrogen storage gaining increasing attention. In 2024, approximately 12 GW of new storage capacity was installed in Europe, bringing the total capacity to around 89 GW. Projections suggest that energy storage capacity could exceed 200 GW by 2030 and reach approximately 600 GW by 2050.

Key elements of the Commission Recommendation

The European Commission Recommendation on Energy Storage aims to support Member States in creating favourable regulatory and market conditions for energy storage deployment. The Recommendation focuses on several key areas:

• removing regulatory barriers and preventing double charging of storage facilities;

• assessing flexibility needs and integrating storage into National Energy and Climate Plans;

• incorporating storage into transmission and distribution network planning;

• improving financing conditions and providing investment support mechanisms;

• ensuring adequate remuneration for storage services;

• introducing competitive bidding mechanisms for flexibility resources;

• enabling active consumers and behind-the-meter storage;

• accelerating storage deployment in islands and remote regions;

• improving data transparency and market information;

• supporting research and innovation in energy storage technologies.

Policy and regulatory frameworks in Member States

The report highlights considerable differences between Member States in terms of regulatory readiness and policy support for energy storage.

One of the key issues is the legal definition of energy storage within national legislation. While several Member States have fully transposed the definition included in EU electricity legislation, others have adopted partial definitions or have yet to establish a clear legal framework.

Another important aspect concerns national strategies for energy storage. Only a limited number of countries have adopted dedicated storage strategies, including Germany, Spain, Ireland and the Netherlands. In most other countries, storage is addressed within broader energy transition or climate policy frameworks.

National Energy and Climate Plans (NECPs) also play a central role. Some Member States have introduced quantitative targets for energy storage deployment by 2030, while others simply acknowledge the importance of storage without setting specific objectives.

Market participation of energy storage

The report also examines the participation of energy storage facilities in electricity markets.

In wholesale electricity markets, including day-ahead and intraday markets, the level of integration across the EU is relatively high and most barriers to storage participation have been removed. However, certain technical limitations remain, such as minimum bid sizes and differences in aggregation frameworks.

Balancing markets represent one of the most important revenue streams for storage technologies. Nevertheless, the integration of balancing markets across the EU remains incomplete and in some countries regulatory or technical barriers still exist.

With regard to ancillary services markets, traditional procurement frameworks are still dominant in many Member States. These systems were often designed for conventional generation technologies and are not always fully adapted to newer technologies such as battery energy storage systems.

Financing mechanisms and investment environment

The report identifies a variety of financial support mechanisms available to energy storage projects across the EU. In many cases, funding is provided through European instruments such as the Recovery and Resilience Facility, the Modernisation Fund and structural funds.

However, the investment environment remains uncertain in many Member States. One of the major challenges is the lack of predictable long-term revenue streams for energy storage projects, particularly for technologies requiring significant upfront investment.

Key challenges and outlook

The report identifies several major challenges that still need to be addressed in order to accelerate energy storage deployment across the European Union:

• fragmented regulatory frameworks across Member States;

• insufficient remuneration mechanisms for flexibility services;

• double charging and unfavourable tariff structures in some countries;

• limited integration of storage in network planning;

• uncertainty regarding long-term investment conditions.

Despite these challenges, the long-term outlook for energy storage remains very positive. Storage technologies are expected to play a crucial role in the European energy transition by enabling higher shares of renewable energy, enhancing energy security and supporting the electrification of the economy.