Unlocking Potential in Europe Part 1
Scandinavian markets offer an attractive battery revenue opportunity with high capture potential.
BESS revenue in the energy markets is directly tied to the market volatility and energy price predictability. While perfect foresight of energy prices set the total revenue potential, practical battery returns highlight the importance of accounting for forecast limits in investment decisions.
The evaluation gives two perspectives on battery revenues across Scandinavian power markets: (1) Total Revenue Potential — the maximum revenues achievable under an optimal dispatch scenario, where batteries always charge at the lowest prices and discharge at the highest; (2) Realized Revenue — the portion of that potential revenue captured using price forecast-based strategies in real market conditions.
DENMARK LEADS THE REGION
K2 stands out with the highest perfect foresight revenue and a capture rate of 79%, proving that attractive volatility can be translated into strong realized value.
VOTALITY ≠ RETURNS; FORECAST IS CRITICAL
Sweden South and DK1 deliver 11% lower perfect foresight revenues than DK2, yet both achieve capture rates above 75%, translating into strong realized value. Finland, despite having a perfect foresight revenue only 6% below DK1, captures just 66%, which significantly narrows its effective potential.
MARKET SPECIFICS
Sweden North and Norway present both low perfect foresight revenues and sub-45% capture rates, highlighting the challenge of forecasting in less liquid or more volatile markets.
The key takeaway for investors: high volatility does not always translate into high returns. Markets with strong capture rates (such as DK2) can outperform those with seemingly attractive perfect foresight revenues although weaker predictability (such as Finland). Sustainable investment strategies must therefore balance both market potential and forecast accuracy.
Notes:
1) 2025 revenues until end of June; 2) Sweden SE3 and SE4 prices averaged; 3) Norway all 5 prices area combined; 4) Sweden SE1 and SE2 prices averaged.
High capture rates seen across Southern and Western Europe.
Countries in the western and southern parts of Europe show similar forecast capture rates of their total revenue potential. However, that does not translate into equal opportunities – market scale and regional variation are key elements to consider in the investment decision.
Our analysis of Spain, Italy, the Netherlands, Belgium, Switzerland, France, and Portugal reveals that similar capture rates do not imply similar revenues.
While Spain achieves the highest capture rate, its overall revenue pool is smaller. For example, France captures a lower share than Spain, yet delivers higher absolute revenues, offering a potentially stronger investment case.
REGIONAL NUANCES MATTER
In Italy, the country-wide portfolio (excluding Sicily) shows better revenue capture rates, yet when isolating Sicily, we see significantly higher perfect foresight revenues despite a 77% capture rate. This demonstrates how regional analysis can reveal hidden opportunities that national averages may obscure.
The Netherlands emerges as the standout, offering the highest perfect foresight and realized revenues in this group, with a potential 85% uplift over Spain, despite near-identical capture rates.
Key takeaway for investors: High capture rates across Europe confirm strong operational predictability. However, market size and regional dynamics ultimately drive investment outcomes. Our approach allows us to analyze countries — and specific regions — with precision, ensuring investment decisions are based on a full understanding of both scale and forecast performance.
Notes: 1) Calabria, Sicily, and Sardinia are not included.
Interested in learning more? Let’s start the conversation.
Gabriel Leite
Lead – Project & Energy Systems Optimization
gle@bluepp.dk
