Building The Business Case For Co-located BESS

TL;DR

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A report published Oct. 8 by Energy Storage describes a meteocontrol mc Advisory model comparing revenues for a theoretical German solar project with and without co-located battery storage. The model projects higher spot-market and EEG revenues with a battery, while the investment case depends on battery size, charging rules, market prices and access to ancillary services.

Energy Storage published an analysis on Oct. 8 in which meteocontrol’s mc Advisory modeled higher projected revenues for a hypothetical German solar project paired with a battery than for a solar-only case. The analysis highlights how battery size, charging strategy and market participation can shape the business case, but its figures are modeled outcomes rather than results from an operating project.

The model considered a 4 MWp solar project with a 4 MW export limit and 1 MW import limit. It compared a solar-only configuration with co-located batteries providing either 4 MWh or 8 MWh of storage, corresponding to two- and four-hour durations at the modeled battery power. The team estimated revenues from day-ahead and intraday wholesale trading, ancillary services, and an assumed floor price of just over €0.05 per kilowatt-hour under Germany’s Renewable Energy Sources Act, or EEG.

For the solar-only base case, the analysis forecast €250,000 in annual spot-market revenue and €145,000 under the EEG. In the co-located case described in the report, spot-market revenue was projected at €400,000, while EEG revenue was €155,000. The report attributes the increase to charging the battery when prices are low or negative and discharging during higher-priced evening hours. These are model estimates; the source does not present them as realized revenues.

The model also assumed that half of available battery power would be offered into the automatic Frequency Restoration Reserve (aFRR) up market. The report says that capacity reserved for the service would not be accepted every time, reflecting competition and changing market conditions. aFRR up supports the grid when there is too little generation or too much consumption, with a battery able to discharge or reduce charging when activated.

How Storage Changes Solar Revenues

The analysis addresses a growing challenge for solar operators: the report says German wholesale prices increasingly show low or negative midday periods alongside higher evening prices. When many solar generators produce at the same time, the value of their output can fall during those hours. A battery can shift some electricity sales to a different part of the day, potentially improving the revenue profile of a solar asset.

For developers, the model’s comparison offers a way to examine whether that potential uplift could justify the added cost and complexity of storage. The report also points to shared infrastructure and grid connections as possible sources of savings, and says adding batteries to existing solar parks may be attractive where permitting takes time. Those considerations do not establish that every co-located project will be profitable; the outcome depends on local constraints, market access, equipment costs and operating choices.

The findings matter beyond one hypothetical project because investment decisions determine how much storage is paired with renewable generation. Batteries may help projects respond to price swings and provide grid services, but revenues from those activities can vary. A business case that relies on several revenue streams therefore needs to account for the conditions under which each one is available.

German Market Conditions Behind the Model

The report frames its analysis against Germany’s changing intraday price pattern. Drawing on charts from Modo Energy, it describes a deeper daytime price trough and a more pronounced evening peak in 2025 than in 2020. It says this pattern can put pressure on solar capture prices while creating opportunities for storage to buy or store energy at lower prices and sell or provide support later.

Developers also face a complex electricity system, according to the report, including four transmission system operators and more than 900 distribution system operators, alongside multiple regulatory processes and fees. The authors say project decisions include whether to co-locate a battery, whether it will operate as a “Green” system charged exclusively from on-site solar or a “Gray” system that can also charge from the grid, and what role ancillary services should play.

The published material describes a model rather than a general forecast for all German projects. It combines wholesale-market optimization with assumptions about EEG support and aFRR participation. Its reported figures should be read within those specific assumptions, not as a guarantee of project income.

“Germany needs batteries. And the same is true of German solar.”

— Falk Haase and Vincent Mingasson of meteocontrol’s mc Advisory, as quoted in the Energy Storage report

Limits of the Revenue Estimates

The figures depend on the model’s assumptions, and the supplied report excerpt does not provide enough detail to reproduce the calculations independently. It does not specify a full set of market-price inputs, battery capital and operating costs, degradation assumptions, financing terms or sensitivity ranges. Without those details, the projected revenue figures cannot establish a project’s net returns or payback period.

The excerpt begins a discussion of “Green” versus “Gray” battery operation but does not include the full comparison or its results. It also does not give a complete breakdown of revenues for both battery durations, or explain how the modeled outcomes change under different levels of aFRR acceptance. The extent to which a project can secure those revenues will depend on market conditions and operational and regulatory requirements.

Project Decisions and Further Evidence

The report’s immediate takeaway is that developers should compare project-specific configurations rather than assume a single battery size or dispatch strategy will fit every site. Further evaluation would need to test storage duration, grid-import limits, charging rules and ancillary-service access against actual project costs and market assumptions before an investment decision.

The source material does not announce a policy change, a project approval or a construction schedule. It remains unclear whether mc Advisory will publish additional model detail or results for other operating strategies. For now, the analysis presents a modeled case for examining co-location, not confirmation that the projected revenue levels will be achieved.

Key Questions

What did the mc Advisory analysis examine?

It modeled revenues for a hypothetical 4 MWp German solar project, comparing a solar-only setup with co-located batteries offering 4 MWh or 8 MWh of storage.

How much revenue did the model project for the co-located case?

The report gives €400,000 in annual spot-market revenue and €155,000 under the EEG for the co-located case it describes. These are modeled estimates, not verified operating results.

Why could a battery improve a solar project’s revenue?

A battery can store electricity during lower-priced or negative-price periods and discharge when prices are higher. The potential benefit depends on market conditions, operating limits and the battery’s costs.

What does aFRR up mean in the model?

Automatic Frequency Restoration Reserve up is a grid service used when the system needs upward support. A battery can provide that support by discharging or reducing its charging; the model assumed reserved capacity would not be accepted on every occasion.

Does the analysis prove that co-located batteries are profitable?

No. It presents modeled revenues for a particular hypothetical project. The supplied material does not provide a full project-cost, financing or sensitivity analysis needed to establish profitability.

Source: rss