Britain is among the markets identified by Aurora Energy Research as Europe’s most attractive for co-location investment.
The analytics company today published its ‘European Co-location Markets Attractiveness Report’, which covers twenty regions. According to the report, Britain is the second most attractive for co-location investment, along with Bulgaria, as it has significant installed capacity and a Contracts for Difference (CfD)-backed pipeline that Aurora says helps offset grid connection delays.
Bulgaria is tied with Britain because its market has strong subsidies, a robust pipeline and favorable economic conditions, while Germany’s market size and internal rate of return (IRR) potential make it number one.
Aurora said it expects a significant pipeline of solar energy storage to come online in Europe within the next five years, with Europe’s co-located renewable capacity reaching 6.3 GW by 2025.
Across Europe, access to the grid was one of the key drivers of co-location, Aurora found, citing the fact that there is more than 1,600 GW of renewable energy and storage capacity waiting for grid connection across the region, of which 550 GW is in GB.
Of that queued energy storage capacity, 100% have a grid connection date until 2035, with little to no opportunity for developers to build new projects before then. This is seeing one increase in co-location in GB as shared network connections or site-specific deployment becomes the most viable option for energy supply before 2035.
This has the added benefit of preventing or reducing discounting, although Britain has relatively little discounting compared to other European markets (Aurora notes that Spain, the Netherlands and Germany will experience more than 500 hours of negative pricing by 2025).
Indeed, Bob Psaradellis, CEO of Island Green Power, which owns and operates large solar-plus-storage sites in Britain, said there no “trade advantage” for the co-location of BESS with solar in Great Britainbut that more efficient use of locations and grid connections can yield other financial benefits.
Aurora’s report notes that battery revenues will decline around 2040 due to market saturation, which along with negative price periods is a risk that co-location can help mitigate by shifting generation and improving capture prices.
Grants were the dominant route to market for co-located projects, Aurora said, with GB, I-SEM (the Ireland and Northern Ireland Shared Network), France, Romania and Estonia highlighted as attractive grant schemes.
