Poland, Italy lead Europe’s battery storage revenue rankings

Clean Horizon has updated the methodology behind its Storage Index, which estimates the revenue potential of BESS across Europe, to better reflect project economics under real-world market conditions.

The revised index replaces its previous assumption that every battery captures the highest-value market opportunities with a model based on average installed capacity. It accounts for competition between assets, existing deployment levels, and the volume of capacity and ancillary service markets available.

The consultancy also updated its COSMOS simulation platform to optimize operations at 15-minute intervals, added Portugal and Romania to the analysis, incorporated intraday market revenues, and removed capacity market revenues from France.

The index evaluates battery participation in energy and ancillary service markets, including frequency containment reserve (FCR), automatic frequency restoration reserve (aFRR), and manual frequency restoration reserve (mFRR), using a reference two-hour battery with 85% efficiency, 1.5 cycles per day, and full availability.

Results for May 2026 show Poland remains Europe’s most attractive battery storage market, with a two-hour battery capable of generating annualized revenues of more than €800,000 ($909,890)/MW. Clean Horizon attributed the result primarily to high aFRR capacity prices averaging more than €120/MW/h during the month.

Italy also ranked among the strongest markets. A four-hour battery in northern Italy achieved estimated annual revenues of €654,000/MW, compared with €640,000/MW in the south. Around 80% of revenues in both regions came from the tertiary reserve (mFRR) market.

Spain recorded a 5.5% month-on-month increase in estimated revenues for a two-hour battery, driven by a 21% increase in aFRR reserve prices and greater volatility in both the day-ahead and secondary reserve markets.

Portugal posted an even stronger monthly gain, with estimated revenues increasing 43% on higher capacity prices and wider spreads across the aFRR, mFRR, and day-ahead markets. Clean Horizon said Portugal’s addition to the index provides a useful benchmark as the country prepares for rapid storage deployment following recent regulatory initiatives.

Germany continued to offer relatively strong revenue opportunities through a combination of energy arbitrage and ancillary services, while France’s estimated revenues fell 17% month on month because of weaker aFRR and mFRR prices, although the consultancy said the market remains attractive for two-hour systems.

The updated methodology also captures early signs of market saturation. In Denmark’s DK1 bidding zone, revenues from aFRR and mFRR capacity markets declined during May as competition among storage assets increased. In DK2, stronger intraday market performance partially offset those declines. Clean Horizon said this type of revenue “cannibalization” was not reflected under its previous methodology.

Among the Baltic markets, Latvia and Lithuania nearly doubled their estimated annual revenues from April, reaching €338,000/MW and €326,000/MW, respectively, on higher aFRR capacity prices. Estonia remained broadly unchanged at around €175,000/MW annually, the lowest level among the Baltic states.

From pv magazine España