Battery storage deployment in France has reached 1GW in 2024, driven by expanding renewable capacity and evolving revenue opportunities in ancillary services markets, but rapid growth presents new challenges and risks for investors and developers navigating this dynamic landscape.
Our comprehensive analysis examines key risks in the French battery storage market:
- Market Saturation: With certified battery capacity projected to exceed aFRR procurement targets by 642% by 2030, early entrants gain advantage as competition intensifies
- Grid Constraints: While curtailment primarily occurs during low-price periods, limiting financial impact, developers must strategically plan for regional grid limitations
- Revenue Stream Vulnerabilities: Battery overbuild scenarios could potentially reduce IRRs by 4.8 percentage points through eroded ancillary service pricing
- Mitigation Strategies: Fixed-price offtaker agreements can provide downside protection while facilitating project financing
The analysis features detailed economic modelling of standalone and co-located battery configurations across multiple duration scenarios (1h, 2h, 4h), offering clear insights for optimal project structuring in today’s evolving market conditions.
