Volue report: Trading performance drives European battery returns

A new white paper from electrification technology company Volue suggests that the economics of battery storage in Europe have shifted from hardware competition to trading performance. According to the research, titled ‘From Asset to Algorithm’, hardware costs, cell chemistry, and warranty terms have largely converged, meaning they no longer serve as primary differentiators between projects.

Volue identifies three key factors that now determine returns: grid access, market access, and trading skill. As frequency-response markets become saturated, the company expects value to migrate toward wholesale and continuous intraday trading. This transition is occurring alongside shortening market timescales, such as Europe’s move to quarter-hourly day-ahead trading, which increases the complexity and frequency of decisions required by trading desks.

Additionally, the report notes that batteries are complex assets to manage because capacity must be balanced across multiple interacting revenue channels while accounting for the degradation costs associated with every cycle. Volue concludes that forecasting, optimization, and execution must now be integrated rather than treated as separate functions to avoid errors that impact asset lifetime value.