Europe's battery profitability
The importance of selecting the right market, duration, and getting the timing right
8 August 2025
Battery pipelines across Europe are swelling. But as developers, investors and lenders ask whether those pipelines translate to profitable opportunities, our answer is: "only in the right markets, at the right durations and at the right time."
Drawing on our extensive Flexibility Market Report coverage across 19 European markets, we compare Internal Rates of Return (IRRs) for 2-hour and 4-hour batteries commissioned in 2026, 2030 and 2035. While capacity mechanisms help boost returns in many markets, duration, timing, cost structures and evolving market conditions play a critical role in determining investment viability.
Complete the form to access the full article, which covers:
- Capacity remuneration mechanisms
- Whether 2- or 4-hour batteries are winning now and in the longer term
- The growth story in Europe
- IRR ranking changes: today's winners aren't necessarily tomorrow's
- Project costs matter: the market with the highest average gross margins isn’t always the one with the highest IRR
- Profitability isn’t everything: market attractiveness goes beyond IRR
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