Bringing innovation to market: business models for battery storage

Power systems around the world have undergone significant transitions towards a decentralization and decarbonization with higher requirements on supply security and flexibility. Technology advancement helps to improve energy efficiency and bring down cost, which in turn promote the growth of battery storage internationally. Business models of battery storage remain vague given its early stages of development but it is clear that there is no universal business model for batteries given the breadth of applications. In this study, we review the main components of existing business models and highlight the areas to be strengthened in a novel business model. Business models should be distinguished at different scales (utility-scale; behind-the-meter application; community-island mode operation) addressing different needs (to replace existing system or to add new capacity). A successful business model of a battery storage system needs to take into account electricity system transition, market and regulatory barriers, among others. Last but not least, it is important to consider innovations in other technologies for the design of a business model.