A Toolbox for energy independence

Europe must develop the technologies its future electricity system needs. With €925 million earmarked for BATT4EU in 2021–2027, the EU has already made a substantial investment in battery research. Sustained support across different chemistries would build on that investment, strengthen European intellectual property and industrial capabilities, and create more options to meet storage needs while diversifying material supplies.

Europe needs its research investment to deliver commercial products and industrial growth. In its 15 October 2026 audit of Horizon 2020’s €17 billion “industrial leadership” priority, the European Court of Auditors found insufficient emphasis on commercialisation and scale-up, alongside weak monitoring of lasting economic results. Battery funding must connect successful research to real customers, commercial orders and manufacturing investment in Europe. Success should be measured through market uptake and industrial growth as well as research results.

The €1.5 billion Battery Booster Facility requires EV-compatible cell production and planned annual manufacturing capacity of at least 10 GWh. The €1 billion IF24 Battery call also targeted EV battery-cell manufacturing. These choices exclude stationary flow-battery manufacturers from important dedicated funding opportunities. Europe already has companies producing flow batteries, electrolytes and components. Its battery policy must help that industry expand and deploy its technologies here.

Growing industrial electricity demand, including from data centres, increases the need for flexibility. The Commission projects EU data-centre capacity to more than double, from approximately 12 GW in 2025 to 28 GW in 2030. Annual electricity consumption is projected to rise from 68 TWh in 2024 to 114 TWh in 2030.

AI workloads can also cause large, rapid changes in electricity demand. Flow batteries’ safety and flexible design make them particularly well suited for integration into data centres and other industrial sites. They can help these sites keep their demand on the grid steadier, store renewable electricity and provide backup power, even under heavy cycling. Accordingly, rewarding industrial flexibility – including faster grid connection where relevant flexibility efforts are demonstrated – would encourage investment in storage, helping business grow while reducing demand peaks and easing congestion on the grid.

European vanadium stockpiles could be leveraged to deliver a double benefit: greater supply security and, through EU-backed leasing, lower upfront costs for European projects using vanadium.

Leasing can replace a substantial upfront material purchase with payments over time, reducing initial capital requirements. The material would support energy storage throughout the lease, with the Facility retaining ownership and recovery rights. Alongside diversified international supply partnerships, a growing European contribution to sourcing, refining and electrolyte production would strengthen the supply chain under the Facility. Recovered material could then support successive installations.

Europe already produces next-generation batteries. For flow batteries alone, EU industrial capacity covers complete systems, electrolytes and components such as stacks, tanks and pumps. Expanding this industrial base, including through international investment and partnerships, would help meet more of Europe’s growing storage demand through local production. This would generate orders and skilled jobs in Europe. With appropriate maintenance, long service lives can also help limit replacement costs, participating in a resilient EU energy system.

Security of supply depends on how long power remains available when the system needs it. A megawatt available for one hour and a megawatt available for eight hours meet different needs. Procurement must recognise that difference where sustained delivery is required. Rewarding verified contributions would support investment in storage that enables greater use of renewable electricity, reduces reliance on fossil backup and limits exposure to imported-fuel prices.

Charging consumption taxes twice on the same electricity makes useful storage more expensive. The Commission recommended preventing double taxation in 2023; implementation must follow. Cost-reflective network fees would give operators clearer incentives to help the grid, while fair market access would allow businesses to earn from the flexibility they provide. Together, these changes would improve storage economics, support industrial electrification and broaden competition in electricity markets.

Financing terms directly affect the cost of deploying storage. In June 2026, the EIB identified extending its €500 million corporate power purchase agreement pilot to storage as a possible next step. Accessible guarantees and lending matched to project lifetimes would help attract private investment and reduce financing costs. Aggregating smaller projects would extend those benefits to more businesses, supporting storage deployment and more predictable electricity supply costs for industrial customers.

Delaying useful flexibility carries a price: in 2024, costs associated with renewable curtailment across just seven European countries were estimated at €7.2 billion, according to the Commission’s Grids Package impact assessment.

Energy storage, including next-generation batteries, can capture renewable electricity that would otherwise be curtailed and supply it when needed. Faster permitting and grid connections for energy storage are essential to lower system costs and support further wind and solar deployment.