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Generating New Revenue During the Energy Crisis

The ongoing energy crisis is putting mounting pressure on business energy costs. The current volatile energy market looks set to continue, and businesses will need to negotiate ongoing cost challenges for the foreseeable future.

For many businesses already operating on narrow margins, mitigating rising energy costs is crucial to their long-term viability. Improving energy efficiency is one vital aspect of that, particularly for energy-intensive businesses where reducing operations isn’t an option. Technologies such as voltage regulation can deliver a significant reduction in energy costs without impacting on productivity, while battery energy storage can deliver flexibility to purchase and use electricity more strategically, further driving down costs.

The growing need for energy balance

Battery energy storage also opens up the possibility of offsetting rising energy costs by generating additional revenue from your asset through engaging with a number of grid balancing services. The rapid increase in the amount of inflexible, renewable generation in the UK has made the grid increasingly unstable, often struggling with either too little or too much electricity, depending on weather conditions. When the weather is unfavourable, we are still largely dependent on gas to make up the shortfall, contributing significantly to the ongoing energy crisis.

Instead, National Grid are increasingly using a range of flexible balancing services to try and balance out supply and demand more effectively. In the long-term, this flexibility will be key to a robust grid that is supplied predominantly, or entirely, by renewable generation.

Generating Revenue

This is where your battery energy storage system (BESS) can be used to actively generate new revenue streams. Batteries are ideal for providing balancing services, given their ability to rapidly draw electricity from the grid or to release it back during periods of high demand. This opens up the opportunity to engage with grid balancing services.

To begin generating revenue through these mechanics, you will need to enter into a contract with National Grid or your local Distribution Network Operator (DNO). For smaller-scale batteries, this is often done through the use of an aggregator, that combines large amounts of distributed technology, including batteries, to create a grid-scale balancing provider.

Businesses taking part in balancing services receive a payment to provide standby flexibility, generating passive income by allowing an aggregator to use their battery to balance the grid. The revenues generated by this aren’t typically enough to cover the cost of a battery alone, but with the growing need for additional site flexibility and resilience, it can be a compelling additional benefit. If your site already has a battery, or you have identified better power resilience or an aim to achieve net zero as part of your future energy strategy, then generating additional, passive revenue can be a useful way of offsetting some of the pain of the energy crisis.