Lithium shortage to slow Europe's battery growth

Volatile power prices have boosted revenues, but new entrants faced with higher capex thanks to spiking lithium prices

Volatile power prices are boosting revenues for batteries in Europe, but spiking lithium prices may be slowing new investments, according to analysts. “Intraday price spreads have more than doubled over the past couple of years, driving higher energy arbitrage revenues,” says Anuoluwa Omojola, research associate for European power markets at consultancy Aurora Energy Research. “Frequency response revenues have also spiked.” As a result, a one-hour battery asset that came online in 2020 in the UK could see its payback period shorten by 2–3 years, according to Aurora’s data. “Intraday price spreads have more than doubled over the past couple of years” Omojola, Aurora "However, it is ve