Overview: The Funding Growth in Energy Storage Sector

European energy storage hardware startups have now obtained a total of 2.14 billion euros in equity funding as revealed by the latest research published. Almost half of the total investment - around 46.7% - has been acquired during the last three years only, which indicates the increasing interest and trust of the investors in storage technologies.

Funding Breakdown: Key Sectors and Technologies

The study shows the distribution of investment over the different sectors of energy storage as follows:

• Battery Energy Storage Systems (BESS): These systems, which are critical for storage of electricity in grids and industries, have drawn a total of €331.8 million in investment. Among them, lithium-based batteries consumed the major part of the budget, containing €221 million for lithium-ion production and €15 million for lithium-sulfur alternatives.
• Mechanical Storage: Unexpectedly, mechanical storage — consisting of technologies like flywheels and compressed air, among others — attracted the highest amount of funding of €696.7 million, even though the number of players in this field is limited.
• Thermal Energy Storage (TES): Companies that are developing solutions for storing heat received €105.9 million, a mix of sensible and latent heat solutions for industrial and specialized applications.
• Emerging Technologies: Less exposed areas like free-standing storage embedded with EV charging, drew up to €435.5 million, demonstrating the request for off-grid or high-power charging solutions. A group of companies engaged in hydrogen storage, power-to-X, and supercapacitors received a total of €146.5 million.

Supply Chain Investment: Supporting Growth

Storage generally attracted investments and more than €259 million were directed to the next generation of battery chemistry, diagnostics, modeling, testing, and cell/module manufacturing. This is a clear sign that the investment community is supporting not only the development of new products but also the wide ecosystem that is necessary for the large-scale production of such products.

Drivers: Why Investors Are Betting on Storage

The following factors are responsible for this immense increase in funding:

• Renewable Energy Integration: The growth of wind and solar energy in Europe has had a positive impact on the demand for dependable storage that can balance supply and demand.
• Grid Resilience and Security: Storage systems play a critical role in making electricity grids more robust against interruptions and variations in demand.
• Energy Transition Goals: European nations are advocating for environmentally friendly energy systems, and storage innovations are crucial in meeting climate and energy goals.

Looking Ahead: Continued Investment and Innovation

The results imply that there will be no stop to the investments in the energy storage hardware, particularly in technologies that facilitate the use of renewable energy and electric mobility. The grants that the startups are obtaining to increase their operations will cause the picture of the European energy storage — inclusive of grid applications and creative use cases — to become even larger.