Spain's Grenergy sees Germany, US as prime markets for battery storage expansion

Spanish renewables developer Grenergy sees Germany and the US as its next big frontiers for battery storage, driven by the growing power needs of datacenters in both markets.

Grenergy's focus, for now, is on Oasis de Atacama, its flagship solar-and-storage development in Chile that will combine nearly 2 GW of solar with about 11 GWh of batteries over seven phases by 2027.

With the project's first phase nearing completion, the company is already anticipating developments in other markets, tapping into its multi-gigawatt global pipeline.

That includes Germany, Europe's largest renewables market but a latecomer in grid-scale battery storage.

Liquidity in Germany's intraday power trading market is among the strongest in Europe, and the country's solar capacity is expected to reach 100 GW in early 2025, boosting the business case for batteries.

"If you ask me now where would I think that our next Oasis de Atacama will be, today I will say there is a fantastic opportunity — even bigger — in Germany for stand-alone [battery] projects," Grenergy chairman David Ruiz de Andres, said Dec. 3 on an earnings call. "I think the hyperscalers are already understanding that they need plenty of storage for their datacenters."

Germany is approaching 2 GWh of operating grid-scale battery storage capacity and is expected to reach 8 GWh by end-2026, according to BVES, the German lobby group for energy storage.

Ruiz de Andrés said Grenergy's approach in the country will see it build stand-alone storage projects, as opposed to hybrid developments like Oasis de Atacama, with the company on the hunt for acquisition opportunities from local developers.

Even without a capacity market — which Germany had planned to introduce by 2028 before the recent collapse of the coalition government — the economics for trading "work very well," Ruiz de Andrés said.

"After Madrid and Santiago in Chile, the third city that I visit most ... is Berlin," the executive added. "Germany is in my opinion ... the most attractive market."

'The US needs a lot of energy'

Another big focus for Grenergy will be the US, which Ruiz de Andrés said will be the company's largest market as soon as 2027.

Grenergy's US development pipeline comprises nearly 5 GW of solar and more than 3 GWh of battery storage, spanning regulated markets in the Southeast as well as Texas.

"Texas reminds us a lot [of] Chile, and we feel very comfortable in Chile," Ruiz de Andrés told analysts, pointing to similar market designs and issues around curtailment. "Some people say this is the Wild West, but we feel very happy working there."

The executive said the industry will likely have to wait "half a year at least" before it is clear how President-elect Donald Trump and the Republican-controlled Congress may change clean energy incentives in the Inflation Reduction Act, while the outcome of an escalating trade war with China is also unclear.

Until then, Grenergy sees an overall supportive picture for green power and storage in the US amid rising electricity demand.

"With any administration in any scenario, the US needs a lot of energy right here, right now, and I think [solar and battery storage] is the only way," the executive said.

Flagship project on track

The first phase of Oasis de Atacama will comprise 103 MW of solar and 589 MWh of storage.

About 30% of the batteries have already been installed, with the remainder expected to arrive in the coming days, enabling phase one to be connected in weeks, Grenergy said.

Two further phases are set to enter operation in 2025 to take the site to 451 MW of solar and more than 2,500 MWh of storage.

Project financing for the third and fourth phases of the operation is expected to close before year-end with the same banking consortium in place that funded the first two phases earlier in 2024.

China-based BYD is supplying batteries for the first three phases, while Amperex recently signed an agreement for phase four.

Oasis de Atacama accounted for almost half of Grenergy's Eur419 million capital expenditure in the first nine months of 2024, with total project capex reaching Eur272 million.

The company's spending so far this year is up 61% compared with 2023 and is higher than the combined 2021 and 2022 capex, Ruiz de Andrés said.

This shows the company is on track with the execution while also showing the magnitude of the company, the executive said.

Grenergy's nine-month EBITDA fell 48% year over year to Eur53 million, primarily due to the sale of its 150-MW Belinchon solar project being reflected in the year-ago numbers.

S&P Global Commodity Insights reporter Alex Blackburne produces content for distribution on Capital IQ Pro.