By Fredrik Olrog
Energy storage won’t fail because of faulty technology. But it is sure to fail if revenue, regulation and risk are misaligned.
The European energy system is undergoing a sweeping transformation, driven by the rapid expansion of renewable electricity and accelerating industrial electrification. As renewable generation continues to grow, periods of low wind and solar production, grid congestion, and increasing constraints have revealed structural flexibility gaps that short-term solutions alone cannot address.
Ancillary grid services must be built in from the earliest planning stages.
To attain true infrastructure-scale efficiency, providers of grid storage and other services need access to predictable, differentiated revenue streams for clearly defined system roles:
- congestion relief
- balancing and reserves
- capacity adequacy / peak shaving
- network deferral
We’re seeing some movement in the right direction.
A coalition of European energy associations recently called on EU institutions, national governments, regulators and system operators to establish a sequential framework for long-duration energy storage (LDES) in Europe.
The signatories of the joint statement highlight LDES as a fundamental factor for energy security, system reliability, and cost-effective decarbonization in a rapidly evolving electricity system.
The coalition’s statement, dated Jan. 22, 2026, urges policymakers to:
- Integrate LDES into the planning and adequacy assessments of national and EU energy systems.
- Ensure fair treatment that is in line with the costs of storage in electricity markets, network tariffs and taxation.
- Align capacity mechanisms with the long-term needs of the system.
- Enable long-term investment and contracting frameworks that support large-scale deployment.
Meanwhile, in the UK, long-duration storage is increasingly recognized as essential system infrastructure rather than a purely merchant add-on — an early indicator of where system-constrained grids are heading.
Britain is laying the financial groundwork to get its grid ready for its ambitious Clean Power by 2030 transition. The government and the City of London created the Transition Finance Council, which has a broad mandate to help providers of capital and transitioning industries.
The Council has estimated that, to meet its modernization goals, Britain will need 30 GW of energy storage by 2030, of which 8GW will have to be Long Duration Energy Storage, where energy is stored for at least eight hours. This need will rise to as much as 16.5 GW by 2050. The UK currently has about 2.8 GW of LDES.
Expanding the LDES sector will require investment of as much as 15 billion pounds before 2030, plus an additional 30-60 billion pounds by 2050.
Storage infrastructure assets, especially LDES plants, need to be designed to last decades, not just until the next technology wave, political cycle, or market tweak.
The energy transition will not be built on prototypes. It will be built on financeable, well planned system infrastructure.
This is the dividing line between energy tech and energy infrastructure. The transition scales on the latter – and finance knows the difference.
Fredrik Olrog is CEO of Mine Storage International