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For developers, investors and EPCs, grid-forming is becoming a decision about grid connection, revenue optionality and lifetime project risk, not simply an inverter feature.
A project designed today must work on tomorrow's grid
A BESS project ordered in 2026 may still be operating in the 2040s. Over that lifetime, the power system around it will change substantially.
In 2025, renewables supplied 47.3% of electricity generated in the EU. The IEA expects that share to reach 63% by 2030, with wind and solar alone rising from 30% to 46% of EU generation. This is good news for decarbonisation and for storage demand. It also changes the technical conditions under which storage connects and operates.
Policy is moving in the same direction. In June 2026, the European Commission's first EU tripartite agreement on energy storage called on participating Member States to submit concrete storage-volume pledges for 2026-2028. By July, the European Economic and Social Committee was considering storage as systemically important infrastructure for a sovereign, affordable and resilient Energy Union. Together, these signals point to faster deployment, closer coordination on permitting and financing, and a larger role for storage in system resilience.
This does not make grid-forming mandatory for every BESS. It does mean that as storage moves from a market add-on to system infrastructure, project teams need to think beyond energy shifting. Connection capability, dynamic support and future system-service eligibility should be addressed early, while plant design, controls, models and commercial assumptions can still be changed.
Wind, solar and batteries are connected through power electronics. Unlike conventional synchronous generators, they do not inherently provide the same level of inertia, system strength and fault current. As the share of inverter-based resources rises, these characteristics can become scarce, especially in weak-grid areas and during periods of low synchronous generation.
That is why the project question is changing.
It is no longer only: Can this BESS follow today's grid?
It is increasingly: Can this BESS help stabilise the grid conditions it will face throughout its operating life?
As inverter-based resources displace part of the synchronous generation fleet, the power system can operate with lower inertia, reduced damping margin and lower fault level. Disturbances may then produce faster frequency changes, more persistent oscillations, weaker voltage support and more challenging protection coordination. The result is a smaller stability margin precisely when the system needs to accommodate more variable generation.
The 2025 blackout in continental Spain and Portugal shows why this cannot be treated as a theoretical concern. ENTSO-E's final investigation did not attribute the event to a single technology. It identified a combination of interacting factors, including oscillations, gaps in voltage and reactive-power control, rapid output reductions, generator disconnections and uneven stabilisation capabilities. These conditions led to fast voltage increases and cascading disconnections across the Iberian system.
Great Britain's power disruption in 2019 offers another lesson. Following a lightning strike, Hornsea One offshore wind farm and the Little Barford gas-fired power station did not remain connected as expected. Their combined loss, together with smaller distributed-generation losses, triggered automatic demand disconnection and interrupted supply to more than one million consumers. Hornsea One and Little Barford each agreed to pay GBP 4.5 million into Ofgem's redress fund.
They show that as the generation mix changes, voltage control, dynamic stability, fault response, protection settings and plant-level validation become system-critical. Grid-forming capability is not a standalone cure for blackouts, but it is one of the tools that can help BESS actively support voltage and frequency instead of relying entirely on a strong external grid reference.
Grid-following control remains effective for many applications. It synchronises to an existing voltage and frequency reference, then controls active and reactive power accordingly. A well-designed grid-following PCS can still provide frequency response, reactive power, voltage support and fault ride-through.
Grid-forming control adds a different capability. It behaves as a controlled voltage source and can establish its own voltage and frequency reference. Depending on the plant design and validated functions, this can support inertial response, phase-jump response, voltage stability, operation under low short-circuit ratio conditions, fast fault current injection and system restoration.
This does not mean every grid-forming product provides every service, or that grid-forming replaces sound network design. It means the PCS can be designed to support the grid actively, rather than relying entirely on a strong external reference.
Europe's regulatory direction is becoming clearer. The draft amended Network Code on Requirements for Generators, widely referred to as NC RfG 2.0, introduces grid-forming requirements for non-synchronous generation and electricity storage modules. ENTSO-E's Phase II technical report, published in November 2025, provides non-binding technical guidance for implementing those requirements.
ACER's recommendation makes grid-forming mandatory for most Type B and Type C power park modules, while allowing nationally assessed exceptions for certain categories. In Continental Europe, 1 MW is the maximum threshold at which a project enters Type B under the existing classification framework; national thresholds may be lower and implementation details remain country-specific.
So the accurate message is not that a single, final EU-wide rule already requires every project above 1 MW to be grid-forming. The practical message for developers and EPCs is more important:
For new utility-scale projects, grid-forming readiness is becoming a material design and procurement requirement now, before every national rule is finalised.
Waiting until the connection agreement or national implementation is settled may leave a project with limited supplier options, late-stage model changes, retesting or hardware redesign.
Most BESS business cases are still built around energy arbitrage, capacity mechanisms and frequency services. Grid-forming capability does not automatically create a new revenue stream, and the value varies by market, location and qualification process.
What it can do is preserve the asset's eligibility for services that reward system strength and resilience, including inertia, short-circuit contribution, voltage support and restoration.
Great Britain provides a useful example. NESO has procured stability services since 2019 and now operates enduring Stability Markets. Its first Mid-Term Stability Market contracts will provide 5 GVA.s of inertia from October 2025 to September 2026, with an anticipated contract value of GBP 25.4 million. NESO also states that providers must demonstrate compliance with higher technical requirements before they can participate in Stability Markets or Electricity Restoration Services.
This is not a revenue forecast for every European BESS. It is evidence that grid-support capabilities are moving from an uncompensated technical characteristic to a procured service in at least some markets.
For an investor, grid-forming capability is therefore best viewed as commercial optionality: it can protect access to future revenue pools without assuming those revenues in the base case.
Grid-forming will not be required in exactly the same way in every country or project. Nor will every grid-forming asset earn stability-service revenue.
But a project that ignores grid-forming until the final connection stage may be making a long-term technical and commercial decision by default.
For developers, the priority is to preserve permitting and connection options. For investors, it is to protect revenue optionality and reduce obsolescence risk. For EPCs, it is to define a testable scope before procurement, models and protection design are locked.
The question is no longer whether grid-forming will matter. It is whether the project has specified enough of it, early enough, to remain bankable on the grid it will actually operate on.
Next in Grid-forming Explained: What is the real difference between grid-forming and grid-following, and why does it matter for utility-scale BESS projects?
Eurostat, 47% of EU electricity came from renewables in 2025, 19 March 2026: https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20260319-2
IEA, Electricity 2026: Supply: https://www.iea.org/reports/electricity-2026/supply
ENTSO-E, Phase II Technical Report on Grid Forming Requirements, 4 November 2025: https://www.entsoe.eu/news/2025/11/04/entso-e-publishes-phase-ii-technical-report-on-grid-forming-requirements/
ACER, Recommendation No 03/2023, NC RfG reasoning: https://www.acer.europa.eu/sites/default/files/documents/Recommendations_annex/ACER_Recommendation_03-2023_Annex_4_NC_RfG_reasoning.pdf
NESO, Why is Grid Forming important?, 9 June 2026: https://www.neso.energy/news/why-grid-forming-important
NESO, First contracts under the Mid-Term Stability Market: https://www.neso.energy/news/neso-awards-first-contracts-under-mid-term-y-1-stability-market
European Commission, EU-level tripartite agreements: energy storage, 26 June 2026: https://energy.ec.europa.eu/strategy/affordable-energy/eu-level-tripartite-agreements_en
European Economic and Social Committee, Energy storage as systemically important infrastructure for a sovereign, affordable and resilient European Energy Union, 15-16 July 2026: https://www.eesc.europa.eu/en/our-work/opinions-information-reports/opinions/energy-storage-systemically-important-infrastructure-sovereign-affordable-and-resilient-european-energy-union
ENTSO-E, Final Report on the Grid Incident in Spain and Portugal on 28 April 2025, published 20 March 2026: https://www.entsoe.eu/publications/blackout/28-april-2025-iberian-blackout/
Ofgem, Investigation into 9 August 2019 power outage: https://www.ofgem.gov.uk/publications/investigation-9-august-2019-power-outage
Regulatory note: NC RfG 2.0 and related ENTSO-E technical guidance continue to move through European and national implementation processes. Project teams should confirm the current requirements with the relevant system operator and national authority.
