At the start of 2022, we predicted that there would be a material increase in the number of utility scale battery storage assets being constructed with a significant backlog of such assets at the shovel ready, planning and pre-planning stages.
What we had not predicted was the invasion of Ukraine and the effect that this would have on wholesale energy prices across Europe and beyond. The increased prices and added volatility created ideal conditions for battery storage assets to operate in. The current environment has created the perfect storm for battery storage assets. There has been a race to secure those sites which have a favourable location and/or a connection offer which is not subject to constraints or a lengthy delay. For these sites which are fully consented, the price is currently above £100,000 per MW.
Looking ahead it seems probable that the enthusiasm in the market for battery storage assets will continue. That said, as the number of sites available with good connection offers declines, it is likely that acquisition activity may cool off with the focus shifting to acquisitions of development platforms rather than individual sites. There should also be a significant increase in the number of battery storage projects which enter the construction and operational phases.
