Europe's Energy Evolution: Storage Revolution and Hydrogen Expansion
Key Ideas
  • Europe is undergoing a gigawatt-scale energy storage revolution, with solar-plus-storage emerging as the cheapest and reliable source of electricity.
  • Fourteen European governments are recognizing the importance of energy storage in their national energy plans and are providing funding for its rollout.
  • The hydrogen sector is expanding rapidly, with major investments and targets for low-carbon hydrogen capacity by 2030, leading to opportunities for investors and infrastructure development.
  • By 2030, Europe's renewable landscape is expected to see advancements in hybrid systems, co-location storage, and substantial growth in solar and offshore wind capacities.
Europe is experiencing a significant shift in its energy landscape with a gigawatt-scale revolution underway. Solar-plus-storage has emerged as the most cost-effective and reliable electricity source, leading to a transformation in how energy is stored and utilized across the region. However, as Europe surpasses 50% of its power supply from renewables, integration challenges are becoming more prominent. To address these challenges, flexible energy storage solutions are essential. Standalone storage is expected to dominate new storage capacity, with hybrid and co-located systems gaining traction from 2027 onwards. Fourteen European governments have acknowledged the importance of energy storage in their national energy plans and are supporting its deployment financially. The hydrogen sector is also experiencing rapid growth, with major players intensifying their decarbonization efforts through hydrogen expansion. Investments in post-FID low-carbon hydrogen projects have reached US$38 billion, targeting significant production volumes by 2030. Public subsidies are crucial in bridging the investment gap for hydrogen projects, with US$50 billion allocated to support capacity that has not yet reached FID. Looking ahead to 2030, the low-carbon hydrogen market is projected to reach a capacity of 14 Mtpa, requiring substantial investments totaling US$1.2 trillion. The renewable landscape in 2025 is expected to witness the emergence of hybrid systems, co-location storage, increased solar and offshore wind capacities, and a shift towards majority renewable energy supply. Overall, the energy evolution in Europe is characterized by advancements in energy storage technologies, rapid growth in the hydrogen sector, and a strong push towards renewable energy sources to meet decarbonization goals.
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