Storage power purchase agreements to enable the deployment of energy storage in Europe

We propose a contractual setup, the proxy storage power purchase agreement (PPA), to foster the deployment of energy storage technologies. We define a threshold price below which the PPA becomes financially attractive for PPA buyers. We compute the threshold price for several storage technologies and configurations, in seven European countries. Such threshold prices overlap with the best-case forecast of the battery levelized cost of storage in 2030, indicating that proxy storage PPAs can play a role in enabling battery storage installations within the next ten years in Europe (generating about €180 million per year). Moreover, we identify UK and Germany as the most attractive countries for storage PPAs in Europe due to the high projected threshold prices and planned storage capacities. We show that revenues are maximized when coupling storage with wind energy generation rather than solar. This points to the design of policies that efficiently subsidize storage installations.