“a number of projects are worthless & will be written off”
GB holds the title of ‘first & largest’ BESS market in Europe.
The GB power market now has over 6GW of BESS capacity operational (~10GWh of storage). It also has a 4 year pipeline of a further 20 GW of BESS projects with Capacity Market (CM) agreements.
GB has not seen flexible capacity deployed at this scale since the ‘dash for gas’ CCGT boom in the 1990s.
Despite strong growth, the GB BESS investment landscape is set to undergo a major transition across the next 3 years. This should set up some major value capture opportunities & determine which players will dominate into the 2030s.
A summary of 5 drivers in play
1. Capital to capacity mismatch
- A significant portion of 20 GW CM pipeline does not have allocated capital and will be delayed or shelved
- Developers will need to raise capital (in an allocator’s market), sell projects or default on CM agreements
- A number of sites are effectively worthless & will be written off (to be replaced over time by more advantaged options).
2. M&A activity is heating up
- The capital mismatch (1.) is fuelling M&A activity in the form of portfolio aggregation & well capitalised new entrants
- It is a capital allocators market, with motivated / distressed sellers driving some well priced opportunities.
3. Debt financing depth
- Deep & growing pools of debt capital are available to lend into GB BESS projects
- Lenders are increasingly comfortable with BESS risk as long as it is backed by strong commercial teams & well structured projects.
- Scale & track record are an advantage.
4. Value capture shifting
- New ancillary products have supported revenue in 2025, but 6GW capacity online is now structurally larger than network service demand
- Value capture from here is firmly focused on wholesale market arbitrage (price spreads & volatility)
- Pricing & management of downside risk will drive competitive advantage of players that dominate value capture going forward.
5. Locational value is being mispriced
- Locational value capture is in a state of flux given policy reform and a transition in system BM pricing & transmission charging (TNUoS)
- Oversimplified analysis (e.g. trend extrapolation) and diverging market views on value capture are creating opportunities.
We recently had a webinar on GB BESS landscape with a particular focus on locational value drivers (5.). You can access the recording here if you’re interested in more.
Strong fundamental drivers underpin the GB BESS investment case. However as the market matures we are set to see a transition from a broad range of smaller scale developers to a more focused group of sophisticated larger capital allocators.
For further details on our GB BESS services including commercial due diligence, asset valuation, offtake structuring & market analysis, feel free to contact our Power Director Steven Coppack (steven.coppack@timera-energy.com).
