Energy storage
Where does the value sit?
Invest in the flexibility stack, not commoditised storage hardware.
"Make hay while the sun shines" is literal here. As solar and wind scale, the challenge is no longer producing clean electrons when conditions are favourable. It is storing the overabundance so it can power homes, factories and grids when the sun sets and the wind slows.
Storage is what makes the rest of the transition pay off. It cuts curtailment, firms up grids and pushes diesel and gas peakers off the system. Without it, every extra GW of solar or wind eventually starts cannibalising its own value.
We do not see energy storage as a single market. Utility-scale Li-ion hardware is commoditising, and the venture opportunity sits higher in the stack: software and VPP orchestration, C&I optimisation, industrial thermal, battery-lifecycle tools and off-grid microgrids. What they share is that they keep earning as hardware margins fall.
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Start with the segment
Value accrues unevenly. The ranking below is how we see it today.
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Look at revenue quality
Recurring or contracted revenue, customer ownership, asset control, and resilience to arbitrage compression.
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Read the geography
Market design determines investability. France favours demand-side flexibility and C&I; Germany and Iberia reward trading and optimisation; the UK is the hotspot for revenue stacking; Italy is becoming attractive for contracted storage through MACSE.
The battery storage paradox
Why the money moves up the stack: the more batteries a market has, the less each one earns from price swings.
The more batteries succeed in reducing price volatility, the less valuable pure volatility arbitrage becomes. That does not break the thesis. It sharpens it: arbitrage is the on-ramp, not the moat.
To hold their value as spreads narrow, companies need structural revenue streams. We believe the winners will not be the companies most exposed to volatility today, but those that remain valuable after volatility compresses.
- Capacity paymentsPaid for being available
- Contracted C&I savingsOn the customer's own bill
- Grid servicesBalancing, frequency, congestion
- Industrial heat replacementDisplaces gas
- Avoided dieselOff-grid and islands
- Recurring software feesDispatch and optimisation
A large market, a narrow venture one
The numbers are big, but size and venture attractiveness are different things. Here is the picture before we say where we think value sits.
Global battery storage system market by 2034, ~19% CAGR.
Global annual flow, 2024.
Added globally in 2025 (112 GW). Fleet ≈630 GWh. BNEF actuals, Apr 2026; the Oct 2025 forecast was 247 GWh.
Added globally in 2025.
VC funding −72%, yet LDES deployments +49% (>15 GWh), 2025 vs 2024.
Cumulative, all-time, Europe.
Market size is not venture attractiveness. The largest categories can produce the weakest venture returns when manufacturers or infrastructure funds capture the value. We watch the layers that control customers, dispatch, data and recurring revenue.
Eight segments, how we read them
Where we think venture-scale value is most likely to accrue today. It is a view, and it will move.
The most interesting ground today is software and VPP, C&I optimisation and industrial thermal. Utility-scale Li-ion is essential to the grid, and structurally harder for a venture-backed company to win.
The flexibility stack, mapped
The value sits above the cell. These are the players we follow in each segment, shown for context. Inclusion is not an endorsement, and several of the names shown are already well funded.
Across Europe, early-stage activity clusters in C&I optimisation and industrial thermal, where buyer economics are clearest. Software and VPP is the highest-value layer and the most crowded, so a defensible wedge matters: an asset class, a country or control of dispatch.
Same battery. Different markets.
The same battery or optimiser earns very different revenue depending on the country. What changes is how each market pays for flexibility: through contracts, regulation, several revenue streams, or market prices.
Revenue from contracts or regulation is protected from the spread compression described above. Revenue that follows market prices is not. That is why we read the country before the company.
Watch pointsFrench capacity-mechanism reform · German storage tariffs and grid fees · UK NESO dispatch reforms · Italy MACSE later rounds · Spain and Portugal capacity design · Nordic FCR/FFR rules.
On C&I flexibility, founders describe France as about five years behind Germany and the UK.
How a country pays for flexibility matters as much as the technology. We find software that can earn under several sets of rules more convincing than a business that depends on one country's.
Not a technology problem. A deployment one.
Storage companies rarely fail because the product does not work. The route to revenue is too slow, too bespoke or too capital-hungry.
We think of storage companies as deployment businesses first and technology businesses second.
What makes a strong company
For each segment: what convinces us, what worries us, and who tends to buy.
How a company charges matters
Batteries create value for C&I customers. The question is whether the startup captures it through a recurring model.
The strongest C&I companies sell recurring software that sits on the customer's existing energy contract, and leave the battery's installation and financing to partners.
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How it charges
Three revenue models, from strongest to weakest.
StrongestSubscription / SaaS
A recurring fee for software that optimises dispatch, tariffs and flexibility markets.
Works if the software truly controls assets.
ConditionalEnergy-as-a-Service
A partner funds and runs the asset. The customer pays a fixed fee or shares savings.
Works with project finance, not venture equity.
WeakestCapex / outright sale
The customer buys hardware. The vendor earns a one-off margin.
Only works with a real software layer on top.
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How it sells
Distribution is the second filter.
Direct salesBest customer ownership, but slow.
EPCs and installersFaster, with less margin and control.
Utility partnershipsScale fastest, with white-label risk.
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What founders told us
Three observations from our conversations.
Founder conversationsTernel researchLarge C&I customers rarely switch supplier. The software that wins sits on top of the existing contract.
PleeviFounder conversation
Battery, building, chargers and solar each run their own system. The value sits in the one optimiser that sees every asset and price signal.
ReflectFounder conversationAt large sites, storage is often a finance decision, not an operations one.
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Three questions we ask
SavingsAre the savings real?
RepeatabilityDoes the model repeat across similar customers?
RevenueCan it earn from both bill savings and flexibility markets?
Important to the grid. Harder as a venture bet.
Some storage models matter a great deal to the energy system and still struggle to produce venture returns. These are the four patterns we see most.
Commoditised hardware
Cells, packs and generic integration are dominated by scaled players. Better performance alone rarely wins.
Unstable revenue signals
Merchant-only BESS earns from spreads that compress as batteries arrive. Single-mechanism plays are exposed to rule changes.
Infrastructure before traction
Funding assets or bespoke projects with venture equity before demand repeats is a long road.
Models that struggle to scale
Residential-only, highly bespoke industrial systems and hydrogen for power-to-power all find scale or economics difficult today.
- Software and VPPMay be less defensible if utilities internalise optimisation.
- Industrial thermalMay scale slowly if factories resist change.
- Long-durationMay stall without bankable multi-day revenue.
- Li-ionCosts may keep falling and crowd out alternatives.
Value follows the flexibility stack.
Energy storage is a core layer of the transition, but not a single venture market. The value sits in software and VPP orchestration, C&I optimisation, industrial thermal, battery lifecycle and off-grid microgrids, where companies win on revenue quality and customer ownership rather than manufacturing or balance-sheet scale.
Long-duration matters, and we are watching it closely. The case becomes compelling once there is a contracted buyer and a credible cost-down path.
Building in that space?
Talk to usTechnologies of energy storage
Storage technologies fall into three families: chemical, kinetic and thermal. Below, a short description of each, then our view of the main technologies.
Batteries and fuels
Electricity converted into a chemical state: electrochemical reactions in batteries, or a fuel such as hydrogen. The most widely adopted form of new storage deployment, with Li-ion the frontrunner.
Motion and compression
Energy converted into physical motion or position, through a moving mass or a compressed medium. Large-scale, long-lived and geographically constrained, with strong economies of scale.
Heat and cold
Avoids the losses of electricity-to-electricity conversion by storing energy directly as heat or cold. A major focus for industrial decarbonisation and impact.
- IEA (2024). Batteries and Secure Energy Transitions.
- IEA (2025). Electricity 2025; World Energy Investment 2025; Renewables 2025.
- LDES Council (2024). 2024 LDES Annual Report.
- BloombergNEF (2024). Energy Storage Market Outlook 2024.
- Wood Mackenzie (2025). Global Energy Storage Outlook to 2035.
- Sympower (2024), Series B1 €21.3M. Sifted (2024), enspired €25M. Tech.eu (2023–2026), Kraftblock and Entrix rounds; Companion Energy €7.8M seed (2026).
- EIT / EU Innovation (2025). Heatventors and Epyr funding.
- Proparco / FMO (2023). Husk Series D mini-grid financing; Bboxx and Winch Energy.
- Energy-Storage.News / electrive (2023–2026). TWAICE and volytica funding.
- Energy Dome (2022–2026). CO₂ Battery Series B €55M, €17.5M EIC award, Google agreement; CMBlu and Ore Energy coverage. PV Magazine (2026), Ore Energy 100-hour pilot at EDF Lab Les Renardières.
- CRE & RTE (2024–2025). French capacity-mechanism reform; EC state-aid approval (Dec 2025).
- dena & BNetzA (2025). German resource adequacy, storage grid fees, balancing markets.
- Ofgem, NESO & Modo Energy (2024–2026). UK Capacity Market, DFS, Balancing Mechanism.
- ENTSO-E, Statnett & Svenska kraftnät (2023–2025). Nordic FCR/FFR and aFRR markets.
- GMInsights & Precedence Research (2025). Thermal energy storage (~€7–9B). SolarPower Europe (2026). EU 27.1 GWh installed in 2025, fleet ≈77 GWh.
- MarketsandMarkets & Future Market Insights (2025). Off-grid microgrids (~€10B, ~19% CAGR). Precedence Research & MRFR (2025). Second-life battery market (~€1.5B, ~23% CAGR). Mordor Intelligence & KBV (2025). C&I / behind-the-meter storage.