Uncertainty Stifles Energy Project Investment
December 2025
Unpredictable market conditions, constant regulatory shifts, and political/global influences are significantly hindering energy project investments. This volatility, coupled with the complexities of the energy transition, makes long-term profitability assessment and forecasting nearly impossible, leading to a decline in investment willingness.
Energy storage, especially battery parks, is vital for integrating variable renewable energy sources like wind and solar power into the electricity system. SolarPower Europe forecasts a sixfold increase in European battery energy volume, from approximately 60 GWh at the end of 2024 to 400 GWh by 2029. Sweden currently has about 1 GW of battery power, mostly installed since 2024.
Benefits of Battery Storage
Flexibility and Rapid Response: Batteries can quickly respond to grid disturbances and provide precise control, making them ideal for stabilizing grid frequency.
Effective Integration of Renewable Energy: Batteries smooth out variations in wind and solar power, reducing price fluctuations and imbalances.
Cost-Effective and Scalable Solution: Declining costs and technological advancements make large-scale battery storage a viable solution, contributing to lower electricity prices and a more sustainable energy system.
Challenges and Recommendations for Energy Storage Deployment
Standardized Connection Fee Calculation
Currently, connection costs for energy storage vary significantly between network companies. There should be a standardized method for calculating these fees, either through clearer regulations from the Swedish Energy Markets Inspectorate or an industry agreement. They advocate for flexible connections where customers accept limitations in exchange for lower costs.
Clear Guidelines and Flexible Contract Structures
Establish clear, consistent guidelines for connecting battery storage, especially when co-located with renewables. Many network owners currently restrict withdrawal subscriptions for charging and market participation.
Special Tariff for Energy Storage
Propose a special tariff for energy storage that recognizes its unique flexibility and system benefits in stabilizing the grid and reducing costs, rather than treating it as traditional production/consumption.
Standardized Design of Power Tariffs
Standardize power tariff design to prevent penalizing energy storage investments and ensure economic efficiency and flexibility encouragement.
Cost-Effective Network Regulation
Revise network regulations that favour new power lines over cost-effective energy storage and digital control.
The Swedish Energy Market in particular
Inspectorate must ensure flexibility is a genuine alternative in future regulations and implement a transparent network connection queue by mirroring Norway, Denmark, and Finland, to improve coordination and expedite connections by identifying energy storage facilitation opportunities.
Improved Access to Electricity Market Data
Support a central data management tool to improve electricity market data access, enhancing market flexibility.
Next Steps/Action Items
- Advocate for regulatory changes with the Swedish Energy Markets Inspectorate.
- Collaborate with industry stakeholders to develop standardized connection agreements.
- Support the development and implementation of a central data management tool for improved electricity market data access.
- Encourage Svenska kraftnät to conduct a comprehensive study on the benefits of integrating 100-200 MW of energy storage into the main grid.
Resource Requirements:
- Dedicated team for regulatory advocacy and industry collaboration.
- Funding for research and analysis to support policy recommendations.
- Technical expertise to evaluate and model energy storage solutions for grid integration.
