Romanian battery storage revenues fell by roughly 35% in August for both two- and four-hour systems, and Clean Horizon’s own exclamation points to one cause: increased competition following the commissioning of new capacity, including the Gura Ialomiței project. That is a live instance of the exact cannibalization dynamic Wood Mackenzie has separately flagged as “looming” for Germany, Europe’s largest battery market, where connection requests for new storage capacity have reportedly reached hundreds of gigawatts, while only a fraction of that volume has actually been built.
Germany’s own performance in this same monthly report is consistent with that structural warning rather than a one-off fluctuation. German battery revenues fell between 1% and 6% in August depending on duration, with Clean Horizon attributing the decline specifically to falling aFRR upward-regulation reserve prices, even as aFRR downward prices stayed elevated and positively correlated with solar output. That is happening in a market Wood Mackenzie separately projects will roughly double its utility-scale battery capacity from 3.5 gigawatts in 2025 to 7 gigawatts by 2034, adding supply into ancillary service markets whose procurement volumes do not expand at the same pace as the fleet competing to serve them.
Poland showed a related pattern: its two-hour battery revenue index fell 8.6% for the month even as the underlying day-ahead price spread widened by 32% to 237 euros per megawatt-hour, a divergence Clean Horizon attributes to rising ancillary capacity reservation prices not fully offsetting the broader revenue decline, again consistent with more capacity competing for a comparatively fixed pool of ancillary product.
The pace of European battery deployment makes that dynamic more likely to spread rather than resolve on its own. Europe’s total installed battery fleet grew 48% in 2025, adding 36 gigawatt-hours and crossing 100 gigawatt-hours of cumulative capacity for the first time, with utility-scale storage, the segment most directly exposed to the wholesale and ancillary markets Clean Horizon tracks, nearly doubling from 9.7 to 19 gigawatt-hours in a single year.
SolarPower Europe projects annual installations will grow a further 44% in 2026, continuing toward 138 gigawatt-hours by 2030. That growth curve mirrors what has already played out in Texas’s ERCOT market, where battery capacity roughly doubled within about two years and has coincided with sharply declining and increasingly volatile per-megawatt revenue, evidence that rapid capacity growth and revenue compression tend to arrive together regardless of which specific grid or continent is examined.
Spain’s gains this month illustrate the genuine, if partial, offset that market flexibility provides. Spanish two-hour battery revenue rose to a range of 482,000 to 506,000 euros per megawatt per year, with four-hour batteries reaching 657,000 to 689,000 euros, roughly 36% to 37% higher than the two-hour figures, a duration premium consistent with longer-duration batteries capturing proportionally more value from wider daily price spreads.
Clean Horizon attributed Spain’s improvement to simultaneous gains across aFRR capacity prices, continuous intraday prices and widening day-ahead spreads, the kind of diversified revenue stack that let Spanish operators shift toward whichever market segment offered the strongest signal that month. France, Italy, Portugal and Finland posted comparable gains through similarly diversified drivers, Portugal’s 16% increase tied to a 32% widening of accessible day-ahead spreads and a 36% rise in intraday prices, Finland’s boost tied to average daily price spreads roughly tripling to 65 euros per megawatt-hour. That flexibility is a genuine operational advantage batteries hold over less adaptable generation assets, and it explains why several markets posted gains in the same month Germany, Poland, Romania and the Baltic states posted declines.
What that flexibility does not do is expand the underlying pool of revenue available within any single market. Ancillary service procurement volumes, day-ahead price spreads and intraday volatility are all bounded by the physical conditions of a given grid at a given time, meaning more battery capacity chasing the same national revenue pool eventually compresses returns no matter how skillfully individual operators rotate between market segments, the dynamic already visible in Romania’s 35% drop and Germany’s smaller but directionally similar decline.
The Baltic states show a related but distinct vulnerability: in Latvia and Lithuania, where two-hour battery revenue fell 17% to 307,000 and 251,000 euros per megawatt per year, respectively, mFRR capacity reserves continued to account for 54% of total revenue, a concentration in a single ancillary product that leaves those markets more exposed to procurement or pricing shifts in that one segment than a market like Spain, which is drawing gains across several market segments simultaneously.
As more European countries follow Germany and Romania’s trajectory of rapid battery capacity growth, the number of markets able to rely on that kind of diversified revenue stack, rather than a concentrated dependence on one ancillary product or a shrinking share of a fixed opportunity, is likely to become the more consequential differentiator between markets that sustain BESS profitability and those that do not.
