Europe's battery boom has a dirty secret
XLE•Europe installed 36 gigawatt-hours of battery storage last year, bringing its total above 100 GWh. Batteries are lowering power prices but can profit from fossil-fuel-driven evening price spikes, while governments continue supporting coal and gas capacity.
1. Batteries reshape prices
Battery systems absorb surplus solar and wind power when prices are low and discharge electricity during higher-priced evening hours. In Bulgaria, where batteries account for more than 20% of installed generation capacity, they can capture spreads exceeding €100 per megawatt-hour; power prices there have fallen around 15% relative to neighbouring markets over the last six months.
2. Fossil-fuel support persists
The article argues that batteries in many leading markets benefit from continued fossil-fuel dependence. EU governments also support coal and gas through capacity mechanisms: the EU approved Germany's 15-year, €35.2 billion mechanism last month, while Italy paid roughly €1.8 billion through its mechanism in 2025.
3. Longer storage needed
The article says wider battery deployment could help provide round-the-clock green electricity, but would likely erode operators' margins and may require government remuneration. Many current systems store only two to three hours of output; longer-duration storage and a mix of renewables, including wind, would also be needed.
