From Price War to Value War: The Next Competitive Dimension Revealed by the Eastern European Energy Storage Market

Created on 2025.12.17

In the Polish energy storage capacity market auction, the "degradation factor" of energy storage systems has dropped from a peak of 96.1% to 57.6% by 2029. Behind this figure is a new battlefield faced by Chinese energy storage companies in Eastern Europe.

In the electricity capacity market auction in Poland in December 2024, approximately 2.5GW of energy storage capacity was awarded contracts, an increase of 44% compared to 2023. Meanwhile, the "degradation factor" of energy storage technology in the auctioned capacity market has decreased from a peak of 96.1% to 57.6% by 2029.

These two seemingly contradictory pieces of data reveal a fundamental shift in the Eastern European energy storage market: the era of solely relying on low prices to secure capacity contracts is coming to an end.

Market Explosion: The Shadow of Price Wars Beneath High-Yield Facades

The Eastern European energy storage market is rising at an astonishing speed. According to an analysis by CITIC Securities, the Eastern European region has a high proportion of power generation from photovoltaics and wind power, with significant fluctuations in spot electricity prices. The return on investment for energy storage projects has exceeded 15%, showing strong short-term explosive potential.

Poland has become a typical representative of this market. The EU has approved a storage subsidy plan for the country totaling over 1.2 billion euros, supporting the construction of more than 5.4 GWh of storage projects.

In the second quarter of 2025, the Polish energy storage market demonstrated strong profitability. Under the dual revenue model of the spot market and automatic frequency recovery reserve services, the revenue of a 1MWh energy storage system increased by 31% month-on-month, reaching €41,985. Analysis by Zhongjin Company shows that a typical household "5kW photovoltaic + 5kWh energy storage" project in Poland can achieve an internal rate of return of up to 15.71% over its entire lifecycle.

The rapid growth of the market has attracted a large number of participants. As of the end of 2023, data shows that the energy storage electricity supply in Poland accounted for only 4.0% of the total electricity supply, and the trading volume of the balancing market involving energy storage accounted for only 3.8% of the total electricity trading volume.

In the Polish capacity market, the share of energy storage capacity delivered in 2024 is 7%, and by 2028, this proportion will rise to 15%.

Competition Upgrade: The Multidimensional Demand for Value in the Eastern European Market

As the number of market participants increases, the focus of competition has quietly shifted. The continuous decline of the "degradation factor" of energy storage technology in the Polish capacity market means that at least 40% of the capacity of awarded energy storage projects needs to rely on arbitrage from spot price differences and other markets to be absorbed.

This change forces companies to seek new competitive advantages, and the dimensions of competition are expanding from a single price to three core areas.

The grid connection capability and technical requirements have significantly improved. After the major blackout incident in Spain in 2025, governments across Europe have placed greater emphasis on the stability of the power grid. The proportion of new energy generation in Europe has reached 30%, and the stability of the power grid is relatively poor, leading to an increasing demand for advanced technologies such as long-duration energy storage and grid-forming PCS.

Localized production and services have become a new threshold. Chinese battery companies have begun large-scale deployments in Hungary. The factory in Debrecen, Hungary, invested and constructed by CATL, is planned to have a production capacity of 100GWh, expected to be put into operation in 2025. EVE Energy's Hungary project is planned to have a production capacity of 30GWh, expected to be put into operation in 2027.

XINWANDA also announced an investment of approximately 1.9 billion yuan in Hungary to construct the first phase of a power battery factory project. These arrangements are not only to avoid trade barriers in the European Union but also to meet the growing demand from European customers for localized supply chains.

The business model and the ability to collaborate with the power grid are being tested. The ownership structure of energy storage projects under construction in Europe is changing, with the proportion of independent power suppliers reaching 45%, while the influence of large utility companies has significantly declined. This change requires energy storage suppliers to have more flexible business models and deeper collaboration capabilities with the power grid.

Value Reshaping: Multidimensional Response Strategies of Chinese Enterprises

In the face of the new dimensions of value competition in the Eastern European energy storage market, leading Chinese companies have begun to build systematic advantages from four aspects: products, technology, localization, and ecological cooperation.

Product Dimension: From general products to scenario-based solutions. In response to the unique environment of Eastern Europe, Chinese companies have launched home storage systems that enhance battery cold resistance to adapt to the local low-temperature environment. In the Polish market, the share of Chinese energy storage PCS brands among the inventory varieties of leading distributors has reached as high as 90%, far exceeding the approximately 75% share of the inverter category.

Technical Dimension: Grid construction capability and long-term energy storage become breakthroughs. As the proportion of new energy in Europe increases and issues of grid stability become prominent, PCS technology with grid construction capabilities and long-term energy storage solutions are becoming the focus of technological competition. These technologies can help maintain stable operation of the grid, and their value has far exceeded that of mere equipment costs.

Localization Dimension: From simple export to deep-rooted presence. The localization strategy of Chinese enterprises has evolved from mere product export to local manufacturing, local services, and even local R&D. In Hungary, the large-scale investments by companies such as CATL and EVE Energy are aimed at building comprehensive capabilities that include localized production capacity, service systems, and technical support.

Ecological Dimension: From individual efforts to collaborative symbiosis. Industry experts suggest that Chinese battery companies can collaborate with small and medium-sized battery enterprises in Europe to form a complementary model of "Chinese technology + local resources." Establish deep binding with downstream customers and sign long-term supply agreements to hedge market risks with order certainty.

Winning the Future: Building a Sustainable Value Ecosystem

The evolution of the energy storage market in Eastern Europe signals the future direction of global energy storage competition. When the "degradation factor" of energy storage systems in Poland's capacity market dropped from 96.1% to 57.6%, it clearly conveyed a message: the era of securing capacity contracts solely through low prices is coming to an end.

The key to winning in the energy storage market in Eastern Europe in the future will depend on whether companies can build a complete value ecosystem that encompasses advanced technology, localized services, grid collaboration, and sustainable business models.

Chinese companies planning to enter or already in the Eastern European market need to reassess their competitive strategies. Should they continue to engage in increasingly fierce price competition, or shift towards high-value niche markets? Should they stick to pure equipment exports, or invest in localized production capacity and service systems? These choices will determine the future position of companies in the Eastern European energy storage market.

The Eastern European market offers not only short-term high-yield opportunities but also a touchstone for testing a company's global competitiveness. At this critical juncture of transitioning from a "price war" to a "value war," companies that can first complete their strategic upgrades are expected to take the lead in the upcoming European energy storage boom.

The rapid growth of the Eastern European energy storage market is quietly rewriting the competitive rules of the industry. As the threshold for capacity auctions shifts from a simple price scale to a multidimensional value metric, a profound transformation has already begun. What is offered here is not only a return rate exceeding 15%, but also a testing ground for assessing a company's overall competitiveness— the future belongs to those value creators who can integrate technological innovation, localized deep cultivation, and deep collaboration with the power grid. The shift from "price wars" to "value wars" is not just a strategic turn, but also an elevation of vision. In this new blue ocean of old and new alternation, real opportunities await those navigators who are the first to complete their self-reinvention.

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