SEAU Chairman Vladyslav Sokolovskyi provided comments for a Delo.ua publication focusing on the development of Ukraine’s battery energy storage systems (BESS) market.
The article pays particular attention to the prospects for energy arbitrage – a model in which energy storage systems charge during periods of low electricity prices and sell electricity during price peaks. The publication also analyzes BESS payback periods, various monetization models, and factors holding back further investment in this segment.
In his comments, Vladyslav Sokolovskyi noted that the basic operating model for BESS is one full charge-discharge cycle per day, while two full cycles based solely on the Day-Ahead Market are relatively rare, as they require two separate pairs of periods with a sufficient price spread.
The SEAU Chairman also highlighted the advantages of long-term contracts in the ancillary services market as a more predictable revenue model for BESS.
“Arbitrage alone no longer appears to be the best business model for BESS. The most predictable revenue is provided by long-term contracts, and these are the projects that banks and investors are most often interested in.”