by Salvatore Scagliarini

The energy transition encompasses three broad market trends: decarbonization and decentralization of energy production, vehicle electrification. All of them have, to different extents, BESS (Battery Energy Storage Systems) in common.

Energy storage has been the long-awaited “Holy Grail” for intermittent, distributed renewable energies, eventually making them dispatchable and able to compete on a level-playing field with conventional, fossil-fuel fired power plants. Additionally, energy storage offers the benefit of being intrinsically flexible, scalable, efficient and expeditious with its modular deployment.

However, energy storage business models are complex and multifaceted from both a technical and commercial as well as regulatory perspective, very much depending on the local market values of the energy commodity being traded. The purpose of this post is to shed light on the business models currently being developed and deployed across different electricity markets on both sides of the Atlantic.

Broadly speaking, energy storage business models can be grouped into two large markets: front-of-the-meter (utility-sided, central application) and behind-the-meter (customer-sided, distributed application). Real-world applications may blur those clear-cut segments, as hybrid business models have the advantage of higher capacity factors and multiple revenue streams, making energy storage a more compelling value proposition.

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