What is a battery energy storage system (BESS)?

2) Merchant Revenues (Dependent on ISO/RTO): Merchant revenues for a Battery Energy Storage System (BESS) are earnings that are obtained from the sale of electricity or related services in the wholesale energy markets, which are overseen by Independent System Operators (ISOs) or Regional Transmission Organizations (RTOs).

What is the revenue model for Bess?

The revenue model for BESS includes multiple streams that contribute to financial viability: Market Sales and Purchases: The BESS generates profit through energy arbitrage, charging when electricity prices are low and discharging when prices peak. This method leverages market fluctuations to ensure optimal profitability.

What drives Bess revenue stack performance in 2021-22?

There are some important common drivers across all European power markets that have shaped BESS revenue stack performance across the last 3 years. All markets generated exceptional BESS returns in 2021-22 driven by a parallel: Power crisis – power market tightness given e.g. major French nuclear outages.

What is a Bess contract?

1) Contracted Revenues: Contracted revenues for Battery Energy Storage Systems (BESS) refer to income secured through binding agreements. These contracts are between the BESS operator and other entities, such as utilities, grid operators, or commercial off-takers.

How is Bess revenue recovery evolving in 2024?

A recovery in BESS revenues has been underway since Feb 2024, as gas prices have recovered & weather conditions normalised. Rising price volatility (& negative prices) from increasing RES penetration have also been an important factor supporting revenue recovery. Let’s look at how the 2024 revenue recovery is evolving across each of the 3 markets.

How much does Bess cost?

BESS cabinet and enclosure costs (e.g., $39.13/kWh for the cabinet). Integration and system design expenses, including engineering, procurement, and construction (EPC) costs. Land acquisition and permitting expenses, which may vary depending on location and regulatory requirements.