37% of the BESS projects awarded under the FEDER call declared a 100% European supply chain to achieve the highest possible score in the industrial criteria. Now, the real challenge will be demonstrating how many of these projects will manage to secure supply contracts, obtain financing, overcome administrative hurdles, and become operational before 2029.
The uncertainty is particularly relevant because the IDAE (Institute for Energy Diversification and Saving) awarded nearly 9.4 GWh of energy storage capacity in Spain, in a call for proposals that also aimed to strengthen the European battery industry. The high participation of projects with a fully European value chain signals support for the EU's strategy to reduce Asian dependence, although various industry stakeholders warn that a significant portion of these initiatives still have a long way to go before becoming grid-connected assets.
In a dialogue with Energía Estratégica , Giovanni Battista Rosada , Sales Manager of ESS Grid at a European battery manufacturer, believes that the percentage achieved reflects the attractiveness of the incentive to prioritize European suppliers, although he suggests that the real evaluation will begin now.
"It didn't surprise me because it's quite a high amount, more than a third of the total. What I'd really like to understand is how many of these 37% will actually be built and how many will become operational. My fear is that 10%, 15%, or 20% of these projects will remain just plans on paper," Rosada stated.
The executive explained that many developers have not yet finalized contracts for battery supply and that they also continue to face challenges related to administrative authorizations and access to connection points.
Despite the uncertainties, Rosada believes that a majority of the projects with a 100% European supply chain will indeed be implemented.
"Some projects may change ownership as they are sold, but I expect that 80% of these 37 will be under construction and operational by 2029," he said.
Beyond European manufacturing, Rosada believes that the Spanish market still faces a deeper unknown: how will they monetize BESS systems once they are operational?
In their opinion, a large part of the developers remain focused on obtaining aid and ensuring the construction of the projects, while there is still little clarity on the business models that will allow them to make those investments profitable.
"The question I ask myself is how these batteries will be valued in Spain. What service will they provide? Will it only be arbitrage? Will it be another ancillary service?" he asked.
As he explained, unlike other European markets where conversations with manufacturers focus on degradation, lifespan, or the services that each technology will provide, in Spain the debate continues to be dominated by obtaining subsidies.
According to the executive, this situation reflects that the main objective continues to be to carry out the projects, leaving the commercial strategy for a later stage.
"The main objective is to build. To build with subsidies, with the least amount of our own capital, and then we'll see. This scares me a lot," he noted.
At the same time, Battista believes that the development of the future capacity market will be crucial in determining the profitability of storage systems, although there are still regulatory aspects that need to be clarified before they can be implemented.
Despite this, he believes the call for proposals has marked a turning point for the sector: "I think the ERDF has already been a great boost for the battery market in Spain," he says, although he insists that the real test will begin when the awarded projects must demonstrate that they can be built, operated, and generate revenue sustainably before the end of the decade.
What does it mean to declare a 100% European supply chain?
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The main novelty of the FEDER call was the incorporation of the criterion "Value Chain and contribution to resilience" , which could contribute up to six points out of the total 100 of the evaluation.
In the case of BESS systems, the score was distributed among the different elements of the supply chain: cell manufacturing contributed one point , while the module or pack , the battery , the power electronics (PCS) , and the energy management system (EMS/SCADA) each contributed between 0.8 and 0.9 points . The system integrator, electrical protections, and operations and maintenance were added to this, bringing the total to six possible points.
The results show that 37% of the projects achieved the maximum score , indicating a fully European supply chain. Another 46% reached five points , reflecting European manufacturing of virtually all components except the cells, while nearly 10% scored 3.4 points , suggesting a greater reliance on Asian-sourced batteries.
Specifically, Rosada believes that the data is striking because cell manufacturing continues to be the main bottleneck in European industry .
"There are few cell manufacturers in Europe. On paper, three; in reality, one," he says.
Currently, cell manufacturing is handled by LG Energy in Poland, CATL in Germany, and SAFT and InoBat with Gotion in Slovakia. He explained that European production remains limited and that the true technological value of energy storage lies precisely in the cell itself . "That's where the know-how is. Everything else is assembly," he noted.
Gotion High-Tech , in Valladolid, represents the most ambitious project in terms of scale and energy integration. The project envisions an investment of around €5 billion and a surface area that could reach approximately 1,000 hectares, with an industrial plant linked to anodes and cathodes and an energy plant based on an associated mega-solar facility for self-consumption.
In that regard, he warns that strengthening European production goes far beyond simply meeting a requirement to access aid. "It would be very serious to risk having the same situation we had with solar panels, where now Europe is merely a buyer," he pointed out.
The executive understands that the projects that reached six points represent an ambitious undertaking. "Five points allow you to reach many more projects. Six points are much more selective," he noted.
Despite the limited European supply of cells, Rosada rules out that the supply of batteries is the main risk for the awarded projects.
"I don't see a problem with the quantity of batteries produced in Europe. I see more of a problem with the financing side, not with the product itself," he stated. In his opinion, the real bottlenecks will be obtaining permits, grid connection points, and early planning of purchases to avoid delays in equipment delivery.
Projects that will closely follow the market
The results of the call for proposals also yielded initiatives that will capture the sector's attention in the coming years. Among them, Palmosilla stands out, promoted by RolWind in Tarifa (Cádiz), with 200 MW and 885 MWh of capacity , which, if completed, will become one of the largest battery storage facilities in Europe. The project received five points in the European manufacturing criterion.
Another unique case is BEIR-TABE , a 40 MW hybrid system with eight hours of storage that achieved the highest industry score. Its duration, longer than the average for awarded projects, raises questions about the technology it will ultimately use.
Overall, the awarded projects show a market dominated by batteries with an average duration of approximately 3.5 hours , with eligible costs close to 700,000 euros per MW , consolidating this technology as the most competitive option for future arbitrage and flexibility applications of the electricity system.
It's worth noting that the 9.4 GWh of storage capacity ultimately awarded will be distributed across 126 projects using various technologies. As reported by Energía Estratégica, three operators hold the leading position in terms of awarded volume, accounting for more than 50% of the total capacity: Iberdrola , with 2,333.7 MWh across 12 projects; Atlantica Sustainable Infrastructure Ltd , with over 1,500 MWh in 8 proposals; and Rolwind Renovables , with just 2 large-scale projects totaling 1,225 MWh.
The FEDER call for proposals determined who will receive the aid. The next test will be much more demanding: verifying whether the 37% promised by a fully European supply chain can be translated into operational batteries, connected to the grid, and with a business model capable of sustaining them beyond the subsidy.