Lithium-ion battery costs are tumbling. But large stationary storage systems still involve high capital outlays, which is why investors and asset owners need to find ways to improve their return on investment.
The flexibility of modern battery storage systems is such that there are often many ways an asset can pay for itself, irrespective of whether it is located in a front-of-meter or behind-the-meter (BTM) setting.
The key is to plan your battery deployment to maximise return on investment (ROI) from the outset – here are our seven best tips for doing this.
1. Consider all possible revenue streams
If you are investing in an energy storage system, then the chances are that you have a specific application in mind, such as delivering front-of- meter frequency response services or improving solar energy self-consumption in a BTM deployment.
However, batteries can usually deliver multiple services – and each one can contribute to the profitability of the asset. Don’t leave any stone unturned when considering the revenue streams your battery can generate.
2. Think about total system benefits
Batteries cannot charge and discharge unless they are connected to other assets, so when looking at ROI, it makes sense to consider a battery as part of a larger system. If deployed alongside PV, for example, a battery can help maximise the utilisation of your grid connection.
3. Model your system before investing
It is important to seek expert help in modelling the benefits of different applications. Going through this exercise can help you assess the ideal battery configuration for the applications that will yield the greatest value, work out the total ROI, and identify the highest-value application(s).
4. Design your battery system for optimum ROI
Once you have a clear idea of where you will achieve the greatest value from battery storage, you are in a position to optimise the system design for ROI. Factors such as cycle rates and average depth of discharge will have an impact on how your system should be configured.
5. Be careful in selecting your supplier
It is important to select tried-and-tested battery technology and have it installed by a trusted, experienced engineering, procurement and construction contractor. At Pacific Green Energy Storage, for example, we have a team that has overseen the installation of more than 380MW and 1.3GWh of battery capacity across more than 30 countries.
6. Configure and operate your system for the best returns
Batteries are amazingly versatile assets, but to realise the value they can offer, you need to set them up and run them in the right way. Energy arbitrage, for example, could provide a valuable income stream, but to take advantage of it you need your battery to be able to respond to market pricing.
7. Make sure you have a maintenance contract in place
In theory, batteries should be able to deliver many years of solid performance with minimal maintenance. In practice, even the most reliable products in the world can sometimes fail, and if that happens you need to make sure your profitability is not affected. Having a maintenance contract in place ensures that even if things go wrong, you’re protected and able to get your asset back up and running – and delivering you profits again.
This Sponsored Editorial was brought to you by Pacific Green Energy Storage. Pacific Green Energy Storage are experts in scalable, turnkey battery energy storage systems. To learn more about their systems, and for more tips on getting the most out of your battery installation, visit www.pacificgreen-es.com.
