Economic analysis of energy storage business models

Abstract

The increasing penetration of renewable energy systems and the electrification of h eat and transport sectors in the UK have created business opportunities for flexible technologies, such as battery energy storage (BES). However, BES investments are still not well understood due to a wide range and debatable technology costs that may unde rmine its business case . In this context, a n economic analysis will be established to assess the economic viability of current BES business models, particularly associated with multiple service portfolios. Our model quantifies the net present v alues (NPVs) and payback periods of BES investments considering various business models and state - of - the - art BES technolog ies. We determine the commercial viabil ity associated with different BES technologies and business models. The developed model compare s different technology costs, business models (i.e. portfolio of services provided ) and BES lifetimes to perform a comprehensive econ omic analysis on the business case for investing in BES. S everal case studies under current GB market arrange ments demonstrate that BES investment associated with multi - service business model s offers the best financial benefits to storage investors and achieve payback periods within 10 years’ lifetime.