Why are more industrial facilities installing battery storage as it ‘can lower electricity costs for everyone’?

Why are industrial facilities not installing battery storage as it ‘can lower electricity costs for everyone’? How can PPA's help these businesses?

October 6th, 2022

Industrial-scale battery storage systems can help lower electricity costs greatly for the facilities they are installed at, but could also help manage the cost of power for the general public.

The Electrical Energy Storage Europe conference in Munich, Germany, discussed commercial and industrial (C&I) battery energy storage systems (BESS) could be a vital source of flexibility for grids across Europe.

On the 10th May the top was raised if C&I storage, described as systems between 30kW to 1,000+kW and installed at different types of commercial and industrial facilities, could be a large benefit to Europe’s energy storage market.

Battery systems can lower the amount of electricity the companies need to take from the grid. If peak shaving, which is reducing grid usage at peak times, is used correctly can also reduce electricity costs dramatically.

In Germany, for example, as demand for electric vehicle (EV) charging infrastructure and renewable energy rises, an increasing portion of the costs of managing the network to accommodate them is levied onto C&I electricity users in the form of demand charges.

Bayernwerk Natur, a company in Bayern Munich installed a 2MW/1MWh lithium-ion BESS at a dairy farm coupled with two 800kW combined heat and power (CHP) generators. The management at the dairy farm is able to save as much as €600,000 per year on its electricity costs, from the use of the grid before installing the new equipment.

The panel discussion’s moderator, Dr Holger Hesse from the University of Applied Sciences Kempten at Technical University Munich mentioned that there has however only been a “little growth” in the C&I market despite “a lot of potential”.

Alongside this ability to reduce onsite electricity costs, batteries at industrial plants could be a great resource for the entire network, but current market design rules don’t value or incentivise this potential, various speakers on the panel today said.

‘We don’t have tariffs that value flexibility

For example, this year on 19th March when there was an abundance of renewable energy, far more than the load on the grid to consume. However on, 20 March, plants kept running and the system went into negative pricing.

C&I storage could bring flexibility to that situation, Lars Stephan, policy and markets director for energy storage system integrator Fluence said, “but in Germany, we don’t have tariffs that value flexibility”. In California’s CAISO grid service area, time-of-use electricity pricing has been introduced, which directly links the price of power with the demand for it from the general public.

Another example Stephan gave included settlement prices in day-ahead auctions at 7 am and 9 am went above €2,700 per MWh, and 28GWh was transacted. This came about because interconnectors with other countries were down, and so was much of the country’s nuclear fleet.

Stephan claimed that if just 500MW of two-hour duration (1,000MWh) battery storage was installed on the French grid and could be used, the clearing price would have been reduced greatly for the French system, and ultimately for French consumers.

Energy storage systems have vast applications, however, only a narrow band of those applications is incentivised for C&I customers that want to invest in them, these applications generally being peak shaving and the enabling of self-consumption of onsite generated renewable energy.

Energy storage hardware and software development company Fenecon’s CEO,  Franz-Joseph Fellmeier, said that as well as recognising and capitalising on the multi-use potential of energy storage, it’s important to derisk investment in the technology and develop an open source ecosystem for hardware and software.

How the energy crisis and PPA’s create incentivisation?


A PPA is a fully funded solar PV model with no, or low, upfront costs which offers reduced energy costs and the opportunity for long-term savings. It allows a developer to design, finance and install a solar PV system on a client’s property. In return, the developer sells the generated energy back to the customer, at a lower and better rate. This is funded by investors who see huge potential in the future of Green Energy. C&I businesses have used this to their advantage as with energy prices ever rising this is a solid plan to reduce energy bills now and eventually be free of grid usage and depending on the energy usage be fully renewable.


  1. Industrial battery storage could lower Europe's electricity costs (energy-storage.news)
  2. https://www.lightsolar.co.uk/funding/