An overwhelming 98% of delegates identified grid connection delays as the biggest execution bottleneck affecting deployable capital.
Gathered in London for Tamarindo’s inaugural Investing in Battery Energy Storage conference, battery storage industry leaders agreed that grid connection delays are causing projects to stall, sometimes for years. This underlined mounting pressure on infrastructure as investment accelerates, with just 2% pointing to supply chain constraints.
This challenge is reflected at the project level, where more than three-quarters (78%) said grid connection queues are the regulatory barrier most responsible for delaying battery storage projects in markets across Europe. Other factors – including market access restrictions (11%), revenue stacking limitations (6%), and permitting timelines (4%) – were seen as significantly less impactful.
Despite these constraints, investment appetite remains strong, with over half (52%) of respondents identifying energy arbitrage as the primary revenue stream currently driving battery storage investment in Europe. Corporate power purchase agreements (PPAs) followed at 23%, while frequency response (13%) and capacity markets (12%) were seen as less dominant drivers.
The findings come at a time when the battery storage sector is scaling rapidly and requiring significantly greater levels of capital.
Stephen Jennings, Chief Sustainability Officer, EMEA at MUFG said, “Storage is no longer a niche financing theme; it’s now an active and fast-growing market with huge potential and scale. Given the magnitude of expected capex needs in Europe in the coming years, the key question becomes how we can ensure these projects remain bankable and continue to attract the liquidity required to fund them.”
Adam Barber, Chief Executive Officer at Tamarindo, said, “Right now, the energy storage market – and particularly the BESS market – has real momentum. In the space of just a few years, the industry has undergone an incredible transformation. It was great to be able to gather industry leaders to share their reflections and thoughts as to where the market is headed.
“While investor appetite is certainly there, we are also seeing a series of structural barriers holding the sector back, most notably securing a grid connection, which has become the single biggest bottleneck to project deployment, with queues stretching from months to years as projects compete for capacity.
“The discussions highlighted how the sector is actively grappling with these challenges and exploring practical solutions to keep investment flowing and projects moving forward.”
