The Future of Energy Storage: Exploring Europe’s Energy Storage Landscape - Insights from €2.14B in Startup Investment
Useful jump links:
- Headline research findings
- Where investment is flowing
- Application requirements
- Engineering considerations
- Supply chain and sustainability considerations
- Ecosystem support
- The future of energy storage
- FAQs
- Conclusion and future outlook
As oil price volatility and geopolitical tensions continue to put energy security back under the spotlight, the energy transition has entered a more demanding phase. After decades of development across industry, government, and infrastructure operators, the question today is no longer whether renewable sources can generate meaningful energy, but how these systems can absorb volatility, manage demand, and keep critical loads operating as generation, consumption, and supply conditions shift simultaneously.
This is the shift from energy security to energy resilience. While security is concerned with access to supply, resilience is concerned with continuity under stress, placing energy storage systems (ESS) under increasing scrutiny. Covering a wide range of technologies, from battery energy storage systems (BESS) and mechanical storage to thermal storage and power-to-X, ESS is becoming central to how governments and industry approach grid balancing without relying on fossil-fuelled flexibility.
This is reflected in national planning, and in the UK, Clean Power 2030 points to 23 to 27 GW of battery capacity and 4 to 6 GW of long-duration storage as part of the flexibility needed to support a cleaner grid. New power loads further galvanise the required response. With the International Energy Agency (IEA) estimating that global data centre electricity consumption reached around 415 TWh in 2024 and demand potentially rising to about 945 TWh by 2030, global data centre BESS deployments could reach 20-25 GW by 2030.
These are the types of figures that underline why storage is no longer secondary. Centralised power networks were not designed around high levels of distributed and variable renewable output, bidirectional power flows, clustered charging demand, and large local loads.
Without sufficient buffering, clean energy will be curtailed, but energy storage provides the system layer that can change this. In this article, Harvey Wilson explores how investment across European energy storage startups is beginning to map the technologies and supply chains needed for resilience.
Opening Up the Energy Storage Landscape Through Data
Understanding Europe’s energy storage landscape requires more than tracking individual technologies or isolated funding announcements. The market is developing across multiple applications, technology classes, and layers of the energy storage value chain, which makes investment data a useful way to understand not only where capital is moving, but which parts of the energy system the market is trying to strengthen.
Avnet Silica’s latest data stories provide that foundation by mapping disclosed equity funding across European startups involved in energy storage, battery energy storage systems and enabling technologies.
What the Headline Figures Show
- €2.14 billion in disclosed equity funding: Total equity funding for European startups producing energy storage hardware has reached €2.14 billion, showing that significant private capital is now moving into the technologies and companies expected to support future energy storage deployment.
- 46.7% raised in the past three years: Almost half of the total funding has been raised recently, indicating that investment activity has intensified rather than being spread evenly across the full period analysed.
- 84.4% raised in the past five years: The sector has become materially more active during the same period in which grid flexibility, renewable integration, electrification, and energy resilience have become more urgent engineering and policy priorities.
- Investment is accelerating with system need: This concentration matters because it shows a market that is not simply benefiting from historic investment, but one that is scaling as energy storage becomes a more important part of how future energy systems are planned, designed, and deployed.
Method and Exclusions
To keep the analysis meaningful, the dataset was defined around companies with a direct role in energy storage hardware, enabling technologies, or the supply chain behind future deployment. It included:
- European startup focus: Avnet Silica’s analysis focused on companies listed under energy storage in the Crunchbase dataset with headquarters in Europe, providing a defined regional view of the startup landscape.
- Expanded company review: The review was then expanded through company websites, Crunchbase profiles, LinkedIn profiles, and third-party articles, allowing the companies to be classified more precisely by technology, application, and position in the value chain.
- Hardware-led scope: The study centred on startups specialising in the production of energy storage hardware for commercial, industrial, and grid-level applications, rather than treating all companies associated with energy storage as directly comparable.
- Supply chain inclusion: Companies focused on the supply chain and manufacturing process within energy storage were also included, recognising that future storage capacity depends not only on finished systems but also on hardware innovation, enabling software, diagnostics, modelling, manufacturing processes, and upstream development.
Value In Data
The dataset, therefore, does not simply describe who is building storage products. It captures a wider ecosystem of technologies and capabilities that can help explain where the European energy storage market is attempting to scale.
The aim is to provide a market map, showing where companies are attempting to scale, where investors are backing alternatives, and where the next set of engineering decisions is likely to become most important.
The following sections use these data stories to examine how funding is distributed across specific technologies, what this reveals about competing storage pathways, and why the next phase of energy storage will be shaped by system fit rather than any single dominant solution.
Technology Pathways: Where Investment Is Flowing
The investment split across the data story points to a central engineering reality: Europe’s energy storage market is not converging on a single technology because different applications place very different demands on storage systems.
Market Research
European energy storage hardware startups raise €2.14B
Total equity funding for European startups in energy storage hardware has topped €2.14 billion. 46.7% of the 2.14 billion was raised in the last three years, and 84.4% in the last five, reveals research from Avnet Silica.
Market Research
BESS startups expand value proposition as competition grows
European startups manufacturing Battery Energy Storage Systems have acquired $331.8 million in equity funding, with 75% of the companies estimated to have reached a phase of commercial maturity, reveals new research from Avnet Silica.
The Data Shows a Market Balancing Power, Duration, and Technology Fit
Across the dataset, funding is distributed between BESS mechanical storage, EV charging with embedded storage, thermal energy storage (TES), hydrogen, power-to-X, supercapacitors, portable systems, and supply-chain technologies, indicating a market shaped by application fit rather than a single dominant storage pathway.
- Mechanical storage reveals the long-duration question: Mechanical storage has attracted €696.7 million, more than double the BESS total, despite fewer companies entering the space and fewer reaching commercial maturity. Most of this funding is concentrated in three companies: Highview Power has raised €339 million for liquid air energy storage, Energy Vault has raised €200.5 million for gravity storage, and Energy Dome has raised €90.2 million for its thermomechanical CO2 battery. This concentration highlights both the opportunity and the risk, with mechanical storage being backed for long-duration and large-scale use cases while its economics remain more closely tied to critical infrastructure, site suitability, permitting, and project scale.
- BESS reflects maturity, but not finality: BESS startups have raised €331.8 million, with lithium-based systems accounting for €236 million of that total. This reflects the strength of lithium-based architectures where response speed, compact deployment, commercial maturity, and established manufacturing are important, but the remaining BESS investment also shows that the category is not confined to conventional lithium-ion approaches.
- Hydrogen, power-to-X, and supercapacitors sit outside conventional battery logic: These categories have collectively attracted €146.5 million. Within that total, hydrogen energy storage accounts for €73.7 million, power-to-X for €54.4 million, and supercapacitors for €18.4 million. The combined figure is smaller than that for BESS or mechanical storage, but its spread across very different technologies shows that some storage needs fall outside conventional battery design. Each addresses a different engineering requirement but typically requires more complex system integration than conventional battery-based storage solutions.
- Thermal storage is application-led: TES startups have secured €105.9 million, mainly split between sensible heat storage at €80.4 million and latent heat storage using phase-change materials at €24.5 million. A separate €20.5 million has been allocated to application-specific solutions with integrated TES, including industrial heat pumps, solar-plus-TES, and refrigeration. The key consideration is not whether thermal storage can compete directly with electrical storage, but whether the application actually requires stored heat or cooling rather than electrical discharge. For engineers, integration depends heavily on process temperature, heat-transfer architecture, storage medium, and the degree of coupling between the storage system and the application.
- Flow batteries point toward longer-duration requirements: Of the €76.1 million raised by flow battery companies, €66.7 million has gone into iron-based flow battery startups. Unlike conventional batteries that store energy within solid electrodes, flow batteries store energy in liquid electrolytes held in external tanks, allowing energy capacity to be increased by enlarging the storage tanks. While this investment is smaller than lithium-based BESS, it is still large enough to show investor interest in systems where duration, cycle life, and scalable energy capacity may matter more than compactness.
- Hybrid and early-stage chemistries remain selective bets: Hybrid batteries received €17 million, including investment in lithium-ion/ultracapacitor technology, while zinc-ion and membraneless redox flow approaches remain at earlier funding stages. That pattern suggests investors are backing alternatives with specific performance advantages, although the market is still treating many of these pathways as application-specific rather than universal replacements.
Click to enlarge - European Energy Storage Startups have raised €2,142,381,573 in disclosed equity funding
Application Requirements Are Shaping Investment Patterns
The data also shows that funding is not only moving into storage technologies themselves, but into the deployment problems those technologies help solve:
- EV charging with embedded storage shows the importance of location: Companies offering EV charging with in-built energy storage have raised €435.5 million, specifically addressing off-grid, remote, or battery-buffered high-power charging. This is a clear data point for engineers because it shows that storage is being funded not only as a grid asset but also as a way to deploy high-power infrastructure at the extremities where grid connections are constrained, delayed, or insufficient.
- Supply chain investment shows where scaling pressure is building: Over €259.4 million has gone into energy storage supply chain startups, with most of that funding concentrated in next-generation battery chemistry and cell/module/pack production. This matters because storage trade-offs are not only decided at the system level but also shaped by the availability of materials, manufacturing capacity, diagnostics, modelling, testing, and battery management capabilities, which determine whether technologies can scale reliably.
- Portable storage highlights temporary and decentralised demand: Three European startups have raised €127.1 million for portable energy storage solutions aimed at events, construction sites, and other temporary or mobile use cases. The design requirements here differ again, with portability, ruggedness, safety, runtime, and ease of deployment becoming more important than the optimisation and integration priorities of fixed grid-scale systems.
The Engineering Conclusion Is Not a Ranking
The most important takeaway from the data is that energy storage is becoming more specialised, not less. Despite frequent discussion about a future dominated by a single storage technology, investment patterns suggest the opposite. Capital is flowing into a broad range of approaches because the market is trying to solve a broad range of problems, ranging from balancing renewable generation, supporting grid infrastructure and enabling high-power EV charging to decarbonising industrial heat, providing long-duration storage and improving energy resilience in locations where conventional infrastructure is limited.
For companies developing, deploying, or investing in ESS, this has clear implications. Technology selection is increasingly tied to the operational context rather than headline performance metrics alone. Efficiency and energy density are not the only questions, and some applications have more pressing priorities in duration, scalability, integration complexity, infrastructure requirements, lifecycle economics, and supply-chain resilience.
Technology Trade-offs and Engineering Considerations
In Europe, the engineering challenge is being shaped by flexibility. The European Commission estimates that renewable electricity will rise from 47% of EU electricity generation in 2024 to around 69% by 2030 and 80% by 2050. Over the same period, flexibility requirements are expected to reach 288 TWh in 2030 and 2,189 TWh by 2050.
That scale of system balancing cannot be addressed by a single approach; it depends on selecting storage technologies that match the timing, location, and form of energy required. This is where the technical trade-offs become more concrete.
- Lithium-ion is strong where modular deployment, fast response, high round-trip efficiency, and commercial maturity are priorities. IEA analysis helps explain lithium-ion’s position in applications with these requirements, reporting that average battery costs have fallen by 90% since 2010, highlighting how falling costs and manufacturing scale have made it the default choice for many short-duration storage applications. However, lithium-ion is less automatically compelling where longer duration, heavy cycling, thermal design, safety requirements, or supply-chain exposure become the dominant constraint.
- Flow batteries offer a different proposition because energy capacity can be increased through larger electrolyte tanks rather than by adding more cells, making them relevant where duration and cycle life matter more than compactness. Flow Batteries Europe has set a target of 20 GW and 200 GWh of flow batteries globally by 2030, while also arguing that approximately half of Europe’s 2030 energy storage needs should come from long-duration energy storage. The trade-off is that flow batteries require more physical space, auxiliary systems, and balance-of-plant infrastructure, making them better suited to fixed, large-scale applications than to compact or highly standardised deployments.
- Thermal storage is particularly relevant where there is a thermal demand that can be shifted in time. Euroheat & Power’s Heat Roadmap Europe 5 highlights that large-scale thermal storage is set to rise from around 0.5 TWh today to 11 TWh/y by 2050, supporting district heating systems as they integrate large heat pumps, electric boilers, wind, and photovoltaics. The limitation is that thermal storage is highly application-specific: its value depends on temperature range, storage medium, insulation, heat-transfer architecture, and how closely the stored heat or cooling matches the end use.
- Hydrogen and power-to-X extend storage beyond electricity into energy carriers. Their value lies in flexibility across power, gas, transport, and industrial systems, especially where energy must be stored for longer periods or moved between sectors. The cost is system complexity: electrolysis, compression or conversion, storage, distribution, reconversion, safety, and infrastructure all become part of the design.
For engineers, the practical takeaway is that storage selection begins with the operating requirement. A grid-scale balancing asset, a battery-buffered EV charger, an industrial heat system, a portable power unit, and a long-duration resilience project will each weigh density, duration, efficiency, scalability, lifecycle, and infrastructure differently. The investment landscape shows the breadth of the market, but the engineering decision still comes down to matching the storage architecture to the constraint that matters most.
BESS as an End-to-End Engineering Challenge
With 75% of European BESS startups estimated to have reached commercial maturity, differentiation is increasingly moving beyond the battery storage unit itself. Suppliers are competing not only on energy capacity, power performance, or chemistry, but on their ability to deliver complete storage solutions across the project lifecycle. Among European BESS startups, 57% advertise turnkey services, primarily installation and systems integration, while smaller shares promote project development (5%), engineering, procurement, and construction (EPC) (8%), and operations and maintenance (O&M) (13%).
Software is becoming just as visible within this end-to-end offering. Research found that 65% of BESS startups provide additional software, including 57% with site-level energy management systems (EMS). A further 7% provide virtual power plant (VPP) or distributed energy resource management system (DERMS) capabilities, while 39% offer asset monitoring and predictive maintenance, and 32% provide analytics and optimisation software. The result is that a modern BESS is increasingly positioned as an integrated combination of hardware, controls, optimisation, and long-term operational support rather than a standalone battery asset.
Supply Chain and Circularity Are in Focus
The challenge of scaling energy storage extends beyond the battery system itself and increasingly depends on the strength and resilience of the supply chain that supports it. The end-to-end challenge, therefore, extends upstream, where scaling storage depends on the technologies, manufacturing capacity, and supporting infrastructure behind the finished system. Over €259.4 million has gone into startups focused on the energy storage supply chain, with €113.2 million directed toward next-generation battery chemistry and €89.0 million toward cell, module and pack production. Together, these two areas account for 78% of supply-chain funding. The remaining funding is spread across diagnostics, modelling and testing (€31.3 million), embedded software and battery management systems (€10.4 million), electrolysis systems and components (€10.9 million), and materials and components (€4.7 million).
The Trendliner is Avnet Silica’s quarterly analysis of technology demand, supply-chain conditions, and component market trends across EMEA. Data from the Q2 2026 market intelligence report reinforces why this matters. In EMEA, energy management is forecast to grow from $1.4 billion in 2025 to $2.0 billion in 2028, an 11.5% three-year compound annual growth rate.
However, the wider supply environment is becoming more difficult, with European manufacturers reporting slower supplier deliveries and higher input costs, while lead times remain stretched for key power and control components. Power semiconductors such as IGBTs and MOSFETs can still take several months to source, and some industrial automation and grid-control equipment continues to face delivery windows that extend well beyond a typical project procurement cycle.
Supply-chain constraints are becoming a defining factor in how quickly storage can scale. While battery chemistry and manufacturing attract most investment, funding is also targeting diagnostics, testing, battery management systems, and other technologies that improve production efficiency, quality assurance, and operational reliability. This reflects a broader industry challenge: scaling storage depends not only on demand for BESS, but on the availability of components, manufacturing capacity, validation processes, and the software layers needed to manage increasingly complex battery systems. As deployment volumes grow, resilience across the supply chain is becoming as important as system-level performance.
Sustainability and Circularity Considerations
This broader lifecycle perspective also shapes how sustainability is being approached within the sector. The data shows that 25% of BESS manufacturers promote the use of recyclable materials, 18% offer second-life battery products, 14% cite low-carbon manufacturing, and 9% mention local sourcing. Circularity is also evident beyond BESS product claims, with two European battery-recycling startups raising €19 million.
These trends directly inform practical decisions regarding battery provenance, replacement strategy, serviceability, and end-of-life recovery. Viewed alongside supply-chain resilience and scalability, sustainability becomes another factor influencing engineering, procurement, and asset-management decisions throughout the life of a storage system.
Avnet Silica: Enabling Energy Storage Innovation Through Ecosystem Support
As ESS architectures become more application-specific, support needs to span solutions, expertise, and insights. Engineers are not only selecting storage technologies but making decisions around power conversion, embedded control, battery management, connectivity, software, cybersecurity, supply continuity, and long-term scalability.
Solutions Across the Technology Stack
Avnet Silica supports this by providing access to a broad semiconductor and technology ecosystem, spanning power electronics, embedded processing, sensing, connectivity, memory, storage, and software. That breadth matters because ESS designs differ significantly across grid-scale storage, battery-buffered EV charging, industrial energy management, thermal integration, portable power, and long-duration resilience.
Expertise From Concept to Production
The expertise layer is equally important. Avnet Silica’s application engineers and technical specialists support customers from early design through production, helping with architecture choices, component selection, integration challenges, lifecycle planning, and supply chain visibility. For startups, the Reach New Heights initiative provides more targeted support, including prototyping and sample access, bill-of-materials screening, local technical guidance, electronics manufacturing services contacts, and connections across the wider electronics industry.
Insight to Inform Better Decisions
Insight completes the picture. Avnet Silica’s data stories show where investment is flowing across BESS, embedded EV charging, thermal storage, long-duration storage, software, and supply chain technologies, while its Trendliner reports provide ongoing visibility into market conditions, lead times, pricing pressures, and application demand. Together, these resources help engineers align design choices with technical requirements, market direction, and future supply realities.
For ESS companies, this combination is valuable because energy storage innovation does not move from concept to deployment through hardware alone. It depends on selecting the right architecture, validating the supporting technologies, securing the supply base, and understanding where the market is heading.
The future of energy management and battery energy storage: Technologies, applications and market evolution
Energy storage is moving from a supporting role in renewable energy projects to a central part of future electricity systems. As grids absorb higher levels of solar and wind generation, storage will be needed to balance supply and demand, provide backup power, reduce curtailment, and improve resilience across homes, businesses, industries and utilities. MIT’s Future of Energy Storage study highlights that storage can complement almost every part of a power system, including generation, transmission, demand flexibility and system planning. [1]
What will the future of energy storage look like?
The future of energy storage will be defined by three major shifts: larger grid-scale deployments, longer storage durations, and more intelligent control of distributed energy assets. Battery storage is already scaling rapidly. The IEA reported that 108 GW of new battery storage capacity was added globally in 2025, around 40% more than in 2024, with installed capacity now eleven times higher than in 2021. [2]
Current deployments are still dominated by short-duration lithium-ion systems, especially lithium iron phosphate (LFP), but future markets will increasingly require technologies that can store energy for four hours, eight hours, several days or even entire seasons. This will create a more diverse storage landscape in which lithium-ion, sodium-ion, flow batteries, thermal storage, hydrogen, pumped hydro, and other long-duration technologies each serve distinct roles.
Key technologies shaping the future of energy storage
- Lithium-ion and LFP batteries
- Lithium-ion batteries will remain a major part of the energy storage market because they are widely available, increasingly cost-effective and well-suited to short-duration applications. LFP batteries are particularly important for stationary storage because they are typically cheaper and better suited to frequent cycling than some higher-energy battery chemistries used in electric vehicles. The IEA states that LFP batteries accounted for around 90% of battery storage deployments in 2025. [3] In the future, lithium-ion systems are likely to dominate applications that require fast response times, daily cycling, and compact installations, such as solar-plus-storage, commercial backup power, EV charging hubs, and grid frequency services.
- Sodium-ion batteries
- Sodium-ion batteries are emerging as a potential alternative for stationary energy storage, particularly where cost, safety and raw material availability are more important than maximum energy density. Sodium is more abundant and geographically widespread than lithium, which could make sodium-ion attractive for grid-scale and industrial storage applications. IRENA has published a dedicated technology brief on sodium-ion batteries, reflecting growing interest in the chemistry for renewable energy systems and grid applications. [4] Sodium-ion batteries are unlikely to replace lithium-ion across every use case, but they could become increasingly important in applications where size and weight are less critical, such as utility-scale storage, commercial buildings and backup power.
- Solid-state batteries
- Solid-state batteries replace the liquid or gel electrolyte used in conventional lithium-ion batteries with a solid electrolyte. This can improve safety, thermal stability, and energy density, making the technology especially promising for electric vehicles, aerospace, medical devices, and compact, high-performance energy systems. CAS describes solid-state batteries as a major advancement with potential to address several limitations of traditional lithium-ion systems. [5] For grid storage, solid-state batteries may play a longer-term role where safety, footprint and cycle life are critical. However, manufacturing scale, cost reduction and material reliability will determine how quickly they move from pilot production into mainstream commercial deployment.
- Flow batteries
- Flow batteries store energy in liquid electrolytes held in external tanks. This makes them attractive for long-duration applications because energy capacity can be increased by expanding tank size, while power output is determined by the cell stack. MIT identifies redox flow batteries as one of the technologies relevant to long-duration storage, although cost, supply and chemistry development remain important challenges. [6] Flow batteries are particularly suited to stationary applications where space is available and longer discharge times are valuable, such as renewable energy integration, microgrids, industrial facilities and grid resilience projects.
- Hydrogen and chemical storage
- Hydrogen can store energy over longer periods than most battery systems, making it relevant for seasonal storage, industrial decarbonisation and hard-to-electrify sectors. In a future high-renewables energy system, surplus electricity could be used to produce hydrogen through electrolysis, which can then be stored and converted back into power, used in industrial processes, or applied as a clean fuel. Hydrogen is not expected to replace batteries for short-duration storage due to efficiency and infrastructure challenges, but it may become important for long-duration, multi-day, and seasonal energy balancing.
- Thermal energy storage
- Thermal energy storage stores energy as heat or cold for later use. It can support industrial processes, district heating, building energy management and some power generation applications. Long-duration energy storage can take several forms, including chemical, thermal, mechanical, and electrochemical systems, and the LDES Council defines these technologies as systems capable of storing and dispatching energy over periods ranging from 8 hours to days, weeks, or seasons. [7] Thermal storage is likely to grow in importance as industries look for ways to decarbonise heat, reduce peak electricity demand and use renewable energy more efficiently.
Future applications of energy storage
- Grid-scale renewable energy integration
- The largest future role for energy storage will be in power grids with high levels of solar and wind generation. Storage can absorb excess renewable electricity when generation is high and release it when demand increases, or renewable output falls. This helps reduce curtailment, improve grid stability and support a more reliable low-carbon electricity system. As storage durations lengthen, batteries and long-duration systems will move beyond short bursts of flexibility and become a core part of grid planning. The IEA notes that battery storage is increasingly acting as a “multi-tool” in power systems, providing several critical services at once, including balancing, flexibility and renewable integration. [8]
- Electric vehicles and vehicle-to-grid systems
- Electric vehicles will increasingly act as mobile energy storage assets. With smart charging, EVs can charge when electricity is cheaper or renewable generation is high. With vehicle-to-grid (V2G), they can also discharge power back to the grid, a building or a home when required. The IEA states that V2G technology enables EVs to provide grid-stabilisation services through bidirectional power flow, helping reduce peak demand and potentially limiting the need for future grid investment. [9] This could make EVs part of a wider distributed energy ecosystem, where vehicles, homes, solar panels, battery systems and grid operators interact dynamically.
- Data centres and critical infrastructure
- Energy storage will become increasingly important for data centres, telecommunications, healthcare, transport systems and other critical infrastructure. These facilities need high reliability, fast backup power and predictable energy costs. As digitalisation and AI increase electricity demand, storage can help manage peak loads, support backup power strategies and improve resilience. Battery-based uninterruptible power supply systems are already expanding. The IEA reported that battery-based UPS capacity additions, mainly in data centres, rose by 30% to 45 GW in 2025. [10]
- Industrial energy storage
- Industrial energy storage will support factories, logistics sites, warehouses, process industries and high-power equipment. It can reduce peak demand charges, support on-site renewables, improve power quality and provide backup during outages. In the longer term, industrial sites may use a combination of battery storage, thermal storage, hydrogen and energy management software to reduce emissions and improve energy flexibility. This will be particularly valuable for businesses facing rising electricity demand, grid connection constraints, or tighter carbon-reduction targets.
- Smart buildings, homes and microgrids
- Homes, commercial buildings and microgrids will increasingly use energy storage to improve resilience and reduce reliance on the grid during peak periods. Residential and commercial batteries can store electricity from rooftop solar, support backup power and participate in demand response programmes. For remote sites, islands and areas with weak grid infrastructure, microgrids with local generation and storage can deliver cleaner, more reliable electricity. Long-duration storage can also support microgrids during extended periods of low renewable generation.
The role of semiconductors and power electronics in future energy storage
The future of energy storage will not depend on batteries alone. Power electronics, semiconductors, sensors, connectivity and embedded intelligence will determine how efficiently stored energy is converted, managed and delivered.
Energy storage systems require conversion between AC and DC power, battery management, thermal monitoring, safety protection, communication with the grid and integration with renewable generation. Technologies such as silicon carbide (SiC) and gallium nitride (GaN) power devices can enable higher efficiency, faster switching, and more compact converter designs, particularly in applications such as EV charging, solar inverters, battery energy storage systems, and industrial power conversion.
Future storage systems will also rely on more advanced battery management systems, real-time monitoring, edge processing and secure connectivity. These technologies will help operators optimise charging and discharging, extend battery life, predict faults, balance distributed assets and improve system safety.
For engineers and system designers, this means energy storage is becoming a system-level challenge. Battery chemistry is important, but the performance of the full system will increasingly depend on power conversion, control software, thermal design, cybersecurity and grid interoperability.
Challenges shaping the future of energy storage
Several challenges will influence how quickly energy storage scales.
- Cost and bankability: Storage technologies must continue to reduce cost while demonstrating reliable long-term performance. This is especially important for long-duration systems, where commercial models are still evolving.
- Raw material availability: Lithium, cobalt, nickel, graphite and other battery materials face supply chain, cost and sustainability pressures. This is one reason alternative chemistries such as LFP and sodium-ion are attracting more attention.
- Grid connection and regulation: Storage projects can be delayed by grid connection queues, permitting issues and unclear market rules. The IEA identifies regulatory uncertainty, grid connection delays and permitting as barriers that could affect the pace of battery storage growth. [11]
- Recycling and lifecycle management: As battery deployments grow, recycling, second-life use and responsible end-of-life processes will become essential. Storage systems must be designed not only for performance, but also for maintainability, safety and material recovery.
- Technology fit: No single storage technology will meet every future requirement. Short-duration, long-duration, mobile, stationary, thermal and chemical storage each have different strengths. The future market will depend on matching the right technology to the right application.
Frequently asked questions on the future of energy storage
| Question | Answer |
|---|---|
|
What is the future of energy storage? |
The future of energy storage will involve a mix of lithium-ion batteries, sodium-ion batteries, flow batteries, hydrogen, thermal storage and other long-duration technologies. These systems will help balance renewable energy, support grid resilience, power electric vehicles, stabilise industrial sites, and provide backup for critical infrastructure. |
|
Which energy storage technology is expected to grow fastest? |
Battery storage is currently one of the fastest-growing power technologies. The IEA reported that 108 GW of new battery storage capacity was deployed globally in 2025, a 40% increase from 2024. [12] |
|
Why is long-duration energy storage important? |
Long-duration energy storage is important because future power grids will need to store energy for longer than a few hours. It can help cover periods of low wind or solar generation, reduce curtailment of renewables, improve resilience, and support industrial decarbonisation. |
|
Will lithium-ion batteries dominate future energy storage? |
Lithium-ion batteries will remain important, especially for short-duration and fast-response applications. However, future energy storage will use a wider mix of technologies, including sodium-ion batteries, flow batteries, hydrogen, and thermal storage, depending on duration, cost, safety, and application requirements. |
|
How will electric vehicles support future energy storage? |
Electric vehicles can support future energy storage through smart charging and vehicle-to-grid technology. With V2G, EV batteries can discharge power back to the grid, a building or a home, helping reduce peak demand and provide flexibility. |
Conclusion and Future Outlook
Europe’s energy storage market is no longer developing at the margins of the energy transition. It is becoming part of the infrastructure needed to make renewable generation, electrification, grid flexibility, and energy resilience work in practice. The funding data support that shift. European startups producing energy storage hardware have already raised €2.14 billion, with 46.7% of that total raised in the past three years and 84.4% in the past five.
The more important point is what sits behind those figures. Investment is not limited to a single answer. It is spreading across technologies, applications, and supply-chain capabilities because storage problems vary by duration, location, load profile, infrastructure constraints, and end-use requirements. That makes system fit more important than headline performance alone.
The same pattern is evident in BESS, where commercial maturity is driving providers to compete on integration, software, lifecycle support, and sustainability. With 65% of European BESS startups offering additional software, value is increasingly being created through control, monitoring, optimisation, and operational insight as much as through the storage asset itself.
For engineers, ESS companies, and technology providers, the future outlook is therefore not simply about deploying more capacity. It is about making better design decisions in a more complex market. Understanding where investment is flowing, where supply-chain pressure is building, and how system requirements are changing will be critical. The next phase of energy storage will depend on combining market intelligence with practical engineering expertise so that systems are not only deployable but also scalable, resilient, and fit for long-term operation.
Sources
- [1] https://energy.mit.edu/research/future-of-energy-storage/
- [2] https://www.iea.org/reports/global-energy-review-2026/technology-battery-storage
- [3] https://www.iea.org/reports/global-energy-review-2026/technology-battery-storage
- [4] https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2025/Nov/IRENA_TEC_Sodium-ion_batteries_2025.pdf
- [5] https://www.cas.org/resources/cas-insights/solid-state-battery-technology
- [6] https://energy.mit.edu/wp-content/uploads/2022/05/The-Future-of-Energy-Storage-release-event-presentation.pdf
- [7] https://ldescouncil.com/
- [8] https://www.iea.org/commentaries/battery-storage-is-scaling-up-and-taking-on-a-larger-system-role
- [9] https://www.iea.org/reports/vehicle-to-grid-technology
- [10] https://www.iea.org/reports/global-energy-review-2026/technology-battery-storage
- [11] https://www.iea.org/commentaries/battery-storage-is-scaling-up-and-taking-on-a-larger-system-role
RESEARCH DATA SOURCES & METHODOLOGY
Source: All companies listed under energy storage in the Crunchbase dataset with headquarters in Europe, as at 22nd September 2025.
Further research was conducted by visiting each company’s website, its profile on Crunchbase, its LinkedIn profile, and third-party news articles to provide more granular details on the product and service offerings of each business. This allowed further categorisation of the companies in the list into more specific classifications.
The analysis then focused on startups specialising in the production of energy storage hardware for commercial, industrial and grid-level applications, including companies that focus on the supply chain and manufacturing process specifically within energy storage.
This involved excluding companies that are focused on, for example, energy and commodities trading, project development, software companies, residential energy storage, natural gas storage, nuclear power, and other closely related products and services.
While the analysis excludes companies that are solely focused on providing software (e.g., software as a service), it does include those providing software specific to the manufacturing of energy storage hardware, such as embedded software, BMS, diagnostics, modelling, and testing.
Hydrogen / power-to-x providers are only included where energy storage is explicitly marketed as a use case, and excludes companies entirely focused on hydrogen / power-to-x as fuel production.
Disclosed equity funding includes seed, angel, VC, private equity and corporate funding rounds. It does not include equity crowdfunding. It also excludes grants, debt financing, IPO and post-IPO funding.
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