Furthering the energy transition is no longer just about adding renewable capacity, but also about ensuring system flexibility. Battery storage has moved from an attractive investment to an essential one, particularly in the wake of recent geopolitical instability.

While Europe has abundant renewable sources, the continent’s lack of fossil fuel reserves means storage represents the most credible path to achieving energy sovereignty, allowing countries to decouple from volatile gas prices. The challenge is no longer just about security of supply, but about protecting the economic viability of the transition itself. By directing capital in the right areas, infrastructure investors can certainly help meet the challenge, explains Federica Gallina, head of investment and asset management at Sosteneo, part of Generali Investments.

How is geopolitical instability affecting specialist investment managers and, more broadly, the energy transition?

The Ukraine war and recent events in the Middle East are clear examples of Europe’s exposure to geopolitical uncertainty and volatile energy prices. For example, following the disruption of gas supplies, due to the ongoing conflict in the Middle East, prices jumped almost 60 percent compared to the week prior to hostilities, pushing peak electricity prices up to three times higher across European markets. This is particularly evident when looking at the difference between day and night prices, as solar power must be replaced by expensive gas-fired plants after sunset.

You can now read the full whitepaper at the link below