Battery storage economics in South-East Europe are entering a structurally stronger phase, as persistent volatility across electricity markets reshapes the underlying value pools available to flexible assets.
Market participants increasingly point to battery energy storage systems (BESS) as one of the most efficient mechanisms for capturing the growing spread between intraday price movements, peak demand events, and balancing market imbalances. In the context of calendar week 13 (23–29 March), where electricity markets demonstrated both downward corrections and rapid rebounds, the monetisation case for storage assets has become more tangible.
Across the SEE region, day-ahead prices averaged between €90/MWh and €120/MWh, with early April spikes pushing levels above €150/MWh in several markets. While such volatility presents challenges for traditional baseload generation and retail hedging strategies, it creates an increasingly favourable environment for assets capable of rapid charge-discharge cycles.
The revenue stack for BESS in SEE markets is now multi-layered. Intraday arbitrage remains the dominant component, with spreads during CW13 typically ranging between €20–40/MWh, and occasionally widening to €50–90/MWh during periods of system imbalance. With approximately 250–330 cycles per year, this translates into a core revenue base that is no longer marginal but increasingly central to investment cases.
Beyond intraday trading, balancing services are emerging as a critical secondary revenue stream. As renewable penetration increases—particularly solar—system operators are facing greater challenges in maintaining frequency stability and managing short-term imbalances. This has led to a gradual expansion of balancing markets across SEE, with revenues for frequency containment and restoration services now estimated in the range of €25,000–60,000 per MW annually.
Peak price capture represents another important layer. The frequent occurrence of scarcity pricing events—where electricity prices exceed €140/MWh and occasionally reach €200/MWh—provides additional opportunities for storage assets to monetize short-duration dispatch. These events, often triggered by sudden drops in renewable output or spikes in demand, are becoming more frequent as system flexibility remains constrained.
Taken together, the total revenue potential for BESS in SEE markets is now estimated at €80,000–180,000 per MW per year, depending on market conditions and asset optimisation strategies. This level of revenue supports equity internal rates of return in the range of 10–16% under base-case assumptions, with upside scenarios reaching 18–24% during periods of heightened volatility.
The structural drivers behind this shift are clear. First, the increasing penetration of renewable energy—particularly solar—has introduced new patterns of price variability, with midday price compression and evening peaks becoming more pronounced. Second, the continued reliance on gas-fired generation as the marginal price setter ensures that price levels remain elevated, even during periods of improved renewable output. Third, limited interconnection capacity within SEE restricts the ability of markets to fully arbitrage price differences, reinforcing local volatility.
From an investment perspective, the attractiveness of BESS is further enhanced by relatively moderate capital costs compared to Western European markets. With CAPEX typically in the range of €450–600 per kWh, or €0.9–1.2 million per MW, storage projects in SEE can achieve competitive returns even under conservative assumptions.
However, challenges remain. Regulatory frameworks for storage participation in balancing markets are still evolving, and revenue stacking requires sophisticated optimisation strategies to maximise returns across multiple markets. In addition, the absence of fully developed capacity remuneration mechanisms in many SEE countries introduces an element of uncertainty into long-term revenue projections.
Despite these challenges, the direction of travel is clear. Storage is transitioning from a niche technology to a core component of the regional energy system. As volatility becomes a defining feature of SEE electricity markets, the ability to capture and monetise short-term price movements will increasingly determine asset value.
