Battery Storage
The market for battery storage is currently in a phase of dynamic growth, while at the same time marking only the beginning of a long-term development pathway. Driven by the energy transition and the growing need for system flexibility, the importance of battery storage for a stable and sustainable energy supply is increasingly coming into focus.
For investors and project developers, the current market environment is becoming increasingly attractive. Falling technology and financing costs, together with a clearer regulatory framework, are creating the basis for profitable storage projects. Although many revenue models are still evolving, this is precisely where the opportunity lies: to position oneself at an early stage and to develop innovative business approaches as well as high-return projects.
A particularly compelling aspect is the broad range of applications offered by battery energy storage systems (BESS): the provision of frequency containment reserve (FCR) and automatic frequency restoration reserve (aFRR), arbitrage trading on the electricity market, the avoidance of imbalance costs, as well as applications in self-consumption optimisation and the reduction of network charges through peak shaving.
As an independent and experienced consultancy, we support you with all energy-sector questions relating to battery storage:
r2b BESS-Model
realistic | market-oriented | robust
The BESS model developed by r2b is designed to provide the most realistic possible representation of economic potentials of stationary battery storage systems. Its purpose is to assess the revenues that can actually be achieved in the market across all relevant marketing channels: from balancing reserves and spot auctions to continuous intraday trading.
In doing so, the model takes into account not only technical constraints such as cycle limits, efficiency and ageing, but also, in particular, the real operating conditions faced by a trader: limited information, stochastic price movements, myopic optimisation and market interdependencies.
Overview of Features and Functions
At the heart of the r2b BESS model is an economic optimisation approach that systematically incorporates uncertainties and price information becoming available over the course of the day – through probabilistic profit forecasts, a realistic representation of stochastic processes in the balancing market, and Monte Carlo simulations for speculative revenues in the intraday market.
Decision points such as auctions (IDA, DA, control reserve) or gate closures in intraday trading structure the daily optimisation process, with each market segment being represented together with its specific products and rules.
A particular strength of the r2b BESS model lies in its comprehensive integration of not only physical, but also virtual and purely financial marketing. This is an extremely important aspect, particularly in intraday trading.
Through full cross-market optimisation, the model evaluates every market decision in the context of all other marketing channels. This enables a precise assessment of complex operating concepts, for example for hybrid assets or under limited grid connection conditions.
The r2b BESS model is not based on idealised assumptions such as perfect foresight. In concrete terms, this means that in pay-as-bid markets such as secondary control reserve, the strategic trade-off between a higher bid (higher revenues, lower probability of acceptance) and a lower bid (lower revenues, higher probability of acceptance) must be taken into account. This allows, for example, both aggressive and lower-risk trading strategies to be analysed.
Since all market segments are explicitly represented and co-optimised on a price basis, changing market conditions, a wide range of asset configurations and regulatory what-ifs can also be appropriately taken into account – the model automatically adjusts its marketing strategy.
Evaluation of Battery Storage Systems
Regardless of the project phase you are in, our r2b BESS model and our continuously updated electricity market scenarios provide the right answer:
- Project-specific individual evaluations for stand-alone batteries, co-location projects and batteries used for load smoothing
- Identification of optimal revenue markets and optimisation of project returns
- Assessment and regular evaluation of route-to-market agreements
- Evaluation of investment decisions (including site and technology comparisons)
- Backtesting of existing assets
Case Studies & Client Feedback
„Using the r2b BESS model, we were able to gain detailed insights into the potential future development of the revenue component of battery storage systems.“
Tarik Berrada | Senior Quantitative Analyst
„Thanks to the robust revenue forecast developed by r2b, including grid-side constraints, we were able to advance the financing of our stand-alone BESS project with a high degree of planning certainty.“
Christian Greb | Spezialist Projektfinanzierung & Energievermarktung
„r2b’s support in evaluating different designs and marketing strategies for co-location projects has opened up new perspectives for us in enhancing the value of our wind farms and further developing our business models.“
Hermann Wallenborn | Managing Director
Do you have questions about battery storage, need a project evaluation or an analysis of the revenue potential of BESS?
We´d be happy to support you – get in touch!
Lukas Strickling
Quantitative Analysis Manager
E-Mail
lukas.strickling@r2b-energy.com
Phone
+49 175 2444043