Why Battery Storage Financing Is Becoming a Local Market Problem Rather Than a European One

Battery storage financing in Europe is becoming increasingly shaped by local electricity markets rather than a single continental investment model. At Balkan Battery Day 2026, the panel on financing and bankability of BESS projects explored why battery projects can no longer be evaluated through a uniform European lens.

Moderated by Iulian Harpa, Managing Partner, HIM Energy, the discussion brought together experts including Pavle Milekic, Associate Director, EBRD, Loukas Botsis, Senior Manager, Baringa and Elena Kalogeropoulou, Head of Flexibility, Optimus Energy. While battery technology itself is becoming increasingly standardised, the panellists agreed that the revenue opportunities surrounding storage remain deeply fragmented across Europe.

That fragmentation may become one of the defining investment challenges for the sector over the coming decade.

Every Battery Market Has Its Own Economics

One of the strongest observations came from Pavle Milekic, Associate Director, EBRD, who explained that a battery project in Greece cannot be assessed in the same way as one in Romania, Bulgaria or Serbia.

Each market operates under its own combination of:

• balancing market structures
• ancillary service mechanisms
• renewable penetration levels
• electricity price volatility
• grid congestion patterns
• regulatory maturity

For lenders, this creates a significant challenge.

Historical market data remains limited, while future revenue streams continue to evolve alongside regulation and market design.

The key financing question is therefore no longer whether batteries will be needed, but how individual national markets will reward flexibility over time.

Merchant Exposure Is Increasing Across Europe

Several speakers highlighted that Europe’s battery sector is steadily moving away from subsidy-supported business models toward greater merchant exposure.

In Greece, early battery projects benefited from auction-based support mechanisms. New projects are increasingly entering fully or partially merchant environments.

While merchant markets can generate attractive returns during periods of high price volatility, those revenues may decline as battery deployment accelerates.

Several ancillary service markets are already beginning to show signs of this transition.

The panel concluded that financing structures will therefore need to become more flexible as revenue sources evolve.

Hybrid Projects Offer Greater Revenue Resilience

Another major theme came from Loukas Botsis, Senior Manager, Baringa, who described how hybrid renewable and storage projects are becoming increasingly attractive to both developers and lenders.

Combining batteries with utility-scale solar or wind assets creates natural hedging opportunities that improve overall project resilience.

Several projects across Southeast Europe are already adopting structures that combine:

• Contracts for Difference (CfDs)
• Power Purchase Agreements (PPAs)
• merchant revenues
• battery optimisation

Blending multiple revenue streams helps create more balanced risk profiles that lenders are better able to support.

As merchant markets mature, these hybrid structures are likely to become increasingly important.

Operational Capability Is Becoming a Competitive Advantage

Elena Kalogeropoulou, Head of Flexibility, Optimus Energy highlighted another major shift.

Battery storage is no longer passive infrastructure.

Successful operation increasingly depends on continuous optimisation across multiple electricity markets operating simultaneously.

Developers therefore require sophisticated:

• trading systems
• forecasting tools
• optimisation platforms
• cyber-secure communications
• market analytics
• dispatch management capabilities

The result is that battery projects increasingly resemble active trading businesses rather than conventional infrastructure assets.

Operational expertise is becoming just as important as the physical battery itself.

A More Disciplined Market Is Emerging

The discussion reflected a broader transition taking place across Europe’s battery storage sector.

The first wave of battery deployment was driven largely by optimism, rapid expansion and attractive arbitrage opportunities.

The next phase is likely to be defined by discipline.

Investors, lenders and operators are placing increasing emphasis on:

• operational resilience
• long-term cash flow visibility
• diversified revenue strategies
• optimisation capability
• regulatory stability

Battery storage remains one of Europe’s fastest-growing infrastructure sectors.

However, as the market matures, success will increasingly depend not on deploying the largest assets, but on understanding the unique dynamics of each local electricity market.