UK battery storage revenues forecast to rebound after ‘challenging period

UK battery storage revenues are expected to recover by 2026 following a period of underperformance, according to Cornwall Insight, a UK consultancy. The company's forecast reveals that annual revenues for two-hour battery storage units may rise from £96 per kilowatt (kW) in 2025 to £108/kW in 2026, as wholesale energy prices, price fluctuations, and renewable energy projects increase.

Joe Camish, lead analyst at Cornwall Insight, shared that these forecasts show a promising outlook for battery storage investors and owners, supporting long-term growth. Recent models predict sustained revenue increases due to anticipated price volatility in the late 2020s.

Battery storage revenues in the UK saw a high in August 2024, with daily revenues reaching £250 per megawatt (MW) on August 21, according to Modo Energy. Increased periods of negative pricing in 2024 — projected to reach 188 hours by year’s end — have also contributed to recent boosts in battery storage earnings. On August 21, battery energy storage systems supplied over 600 MW to the UK grid through the Balancing Mechanism, adding £47/MW to revenues.

The positive forecast, driven by energy market shifts and increasing renewable capacity, points to a stable path for battery storage investments through the decade.