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Battery Storage: The Investment That Looks Simple Until You Model It

The case for investing in battery storage seems obvious. Until you start building the business case. Revenue comes from stacking multiple markets simultaneously — and a small wrong assumption can move your IRR from attractive to marginal.

Marc Schicks

Battery storage has never looked more attractive. Falling costs, rising volatility, regulatory support — the case for investing seems obvious.

Until you start building the business case.

The revenue of a battery doesn't come from one market. It comes from stacking multiple streams simultaneously: Day-Ahead, Intraday, balancing, aFRR, FCR, local purchase contracts. Each with its own rules, constraints, and uncertainties. Each assumption you make about one market interacts with all the others.

Battery revenues by market stream — 2025

A small error in your capacity degradation model, a wrong assumption about FCR availability, an optimistic view of aFRR activation rates — and your IRR moves from attractive to marginal. The investment still gets made. The return doesn't materialise.

This is what we built our battery optimisation model for. Not to give a definitive answer, but to let developers and industrial players stress-test their assumptions quickly — across market layers, against different price scenarios, with their own technical constraints plugged in.

The smartest investors we work with don't use it to get a number. They use it to understand which assumptions their business case is most sensitive to. That's a different — and more valuable — question.

Battery storage is becoming the backbone of flexibility in the energy transition. Getting the model right before you commit is what separates a good investment from an expensive lesson.


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