The Polish power grid faced severe challenges in 2024 — the highest curtailment rate reached 70.7%, with a large amount of photovoltaic power unable to be absorbed, highlighting the urgent need for flexible energy storage resources in the power system.

At the same time, a storage project in Poland performed well in the second quarter of this year, with a dual revenue model from the spot market and ancillary services market, where a 1 megawatt-hour storage system's revenue increased by 31% quarter-on-quarter, reaching 41,985 euros.

The European energy storage market is at a structural turning point. According to an analysis by CITIC Securities, 2025 is expected to be a breakthrough inflection point for the large-scale energy storage market in Europe.

The yield of energy storage projects in most European countries has increased to 10%-15%. Behind this data is the frequent occurrence of negative electricity prices in Europe, which has led to an expansion of the spot peak-valley price difference.

The market size forecast is encouraging. It is estimated that by 2030, the annual new installed capacity demand for energy storage in Europe is expected to reach 165GWh, corresponding to a market space of about 170 billion yuan. There is a clear trend of regional differentiation: Western and Southern Europe have a larger long-term volume, while the Eastern European market shows a characteristic of "strong short-term explosive growth."

This judgment is mainly based on the higher return on energy storage projects in Eastern Europe—over 15%, far exceeding the European average. A higher return means faster investment returns and stronger market drivers.

The explosion of the Eastern European energy storage market is not a coincidence, but the result of multiple factors working together.

First, there is the fundamental driving force of economic efficiency. Taking Poland as an example, an analysis by CICC shows that a typical residential "5kW photovoltaic + 5kWh energy storage" project can achieve an internal rate of return (IRR) of up to 15.71% over its entire lifecycle.

In the commercial energy storage sector, the Polish project has performed exceptionally well. In the second quarter of this year, the revenue from Polish energy storage systems saw significant growth, with the revenue from the 2MWh system increasing by 35% quarter-on-quarter, reaching €55,319.

Secondly, there is an urgent rigid demand for the power grid. The absorption problem faced by the Polish power grid is extremely severe, with the highest abandonment rate of solar power reaching 70.7% in 2024. The maximum load of the power grid does not exceed 13GW, while the combined maximum power of wind and solar can reach 16GW, far exceeding the load limit.

The third is strong policy support. In October 2024, the European Union approved a storage subsidy plan for Poland totaling over 1.2 billion euros, supporting the construction of more than 5.4 GWh of storage projects.

The subsidy is quite substantial, covering up to 65% of the total investment cost (for small enterprises) and up to 55% for medium-sized enterprises. This subsidy program will complete project applications by the end of May 2025, with approvals to be finalized by the end of the year.

In the Eastern European market, energy storage projects achieve high returns mainly through several core operating models.

The wind-solar complementary storage model is a direct solution to the problem of curtailment of solar and wind energy. Poland has already obtained grid connection agreements for projects, including nine schemes co-located with solar power generation.

One of Poland's largest electricity producers, PGE, plans to achieve 800MW of energy storage capacity by 2030. The 205MW battery storage project currently in tender, located in Zarnowiec, will work in conjunction with the existing pumped storage power station to provide ancillary services for wind and photovoltaic power within a 30-kilometer radius.

The independent energy storage operator model obtains stable cash flow by participating in the capacity market. Poland introduced the capacity market mechanism in 2018, and the participation of energy storage in this field has rapidly increased.

Data shows that the energy storage capacity delivered in 2024 will account for 7% of the capacity market, and by 2028, this proportion will rise to 15%.

The Spanish energy company GreenVolt has acquired a 51% stake in KSME through its Polish subsidiary, gaining a portfolio of 5.56GW, of which 1.4GW comes from capacity market procurement.

Peak-valley arbitrage is another fundamental revenue source for energy storage projects. With the frequent occurrence of negative electricity prices in Europe, the spot market's peak-valley price difference continues to widen, creating considerable arbitrage opportunities for energy storage. From January to September this year, the average peak-valley price difference in most regions of Europe has exceeded 85 euros/MWh.

Chinese energy storage companies face significant opportunities in the European market. According to Wood Mackenzie data, Sungrow has entered the top three market shares in Europe in 2024.

The domestic energy storage PCS (energy storage inverter) performs particularly well in the Polish market, with Chinese brands accounting for as much as 90% of the varieties in local distributors' inventories.

In the inverter category, Chinese brands also occupy about 75% of the market share.

Multiple Chinese companies have made substantial breakthroughs in the Eastern European market. Trina Storage has signed a strategic agreement with Eastern European EPC company Stiemo, planning to jointly deploy gigawatt-hour level energy storage systems in Eastern Europe over the next 2-3 years, with the first three projects having a total capacity of 90MW/180MWh.

Nenghui Technology signed a 350MWh energy storage framework contract with European companies in December 2025, and the first batch of orders has been fulfilled. Chuangneng New Energy has successively won bids and signed contracts for energy storage projects of 340MWh in Honduras and over 1GWh in Bulgaria, with products already shipped to multiple countries in Europe.

However, challenges also exist. Europe is raising the technical threshold. After the major blackout event in Europe in 2025, the EU is accelerating the promotion of the "Grid Connection Requirements for Generators Network Standards," making grid-forming technology a mandatory requirement for energy storage projects above 1MW.

The demand for localized production capacity and services in the European market is also increasing. Chinese battery cell manufacturers are actively building factories in Germany, Hungary, and other locations to meet potential localization capacity demands.

At the same time, the market participants are changing. Currently, among the owners of energy storage projects under construction in Europe, the proportion of independent power suppliers has reached 45%, while the influence of large utility companies has significantly declined, which poses new challenges to the sales channels of Chinese enterprises.

For Chinese companies planning to enter the Eastern European energy storage market, it is crucial to develop practical and feasible strategies. The primary task is to seize the policy window period. Taking Poland as an example, its energy storage subsidy policy will expire at the end of 2025, and it is recommended that companies lay out their plans early to seize market opportunities.

It is necessary to fully assess market demand and reasonably plan project capacity. The energy storage market in Poland is developing rapidly, but the current market size is relatively limited, and market competition is gradually intensifying.

Deeply integrating into the local market through joint ventures or mergers and acquisitions is a wise choice. Currently, Chinese companies mainly participate in the Polish energy storage market through equipment supply, resulting in a relatively shallow market integration.

By extending the service value chain and increasing the added value of services, market opportunities can be better grasped. Enterprises also need to pay attention to the fact that energy storage is a key infrastructure and may face strict investment scrutiny, so it is necessary to prepare risk prevention plans.

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