Since 2020, the Battery storage revenues in the German energy market have developed positively and risen continuously, which is attributable to various influencing factors and market trends. This positive dynamic shows that Battery storage are increasingly being recognized as important players in the energy industry. Especially in the Primary control power market and on Spot market battery storage systems have taken on a new significance as a source of income for storage system operators.
The marketing of primary control power (PRL) - also known as primary control reserve - has traditionally been the most lucrative option for battery storage systems. Their main task is to provide extremely Short-term fluctuations in the power grid and to keep the frequency of the power grid at a stable value (50 Hertz in Europe). However, the marketing of secondary control power (SRL), which normally stabilizes the power grid within 30 seconds to 5 minutes after a frequency deviation, is also increasingly becoming the focus of industrial battery operators.
Rising battery storage revenues in electricity trading and on balancing energy markets
In the year 2021 operators of storage systems with a capacity of 1 MW and a storage depth of 1 MWh were able to store around 136,000 euros on the PRL market. This figure rose in the year 2022 to about 180,000 euros and by autumn 2024, operators of a two-hour storage system could even achieve around 195,000 euros per megawatt. All of these figures point to a sustained Strong demand and Volatile markets there.
In comparison, exclusive marketing in the primary control power or secondary control power would only have had around 125,000 euros per megawatt. In electricity trading over the same period, there were around 145,000 euros per megawatt. These figures illustrate the yield dynamics that arise from the combination of different marketing strategies.
Markets, battery systems and the right mix are crucial
The composition of the revenues varies depending on the storage duration: In two-hour systems, the revenues mainly come from secondary control power and electricity trading. One-hour systems, on the other hand, generate a relatively even distribution of revenues between primary control power, secondary control power and trading. These differences emphasize how strongly the Deployment strategy and Storage capacity can influence profitability.
The primary control reserve (PRL) market has shown stable growth from 2021 to 2022. However, since 2023, there has been a convergence with the SRL market, which puts the PRL into perspective as a source of income. At the end of 2022 and beginning of 2023 in particular, spot market revenues also converged with those of the PRL market, allowing for greater strategic flexibility in the marketing of storage capacities.
The revenue potential of the spot market also increased in 2022 and 2023. In some months, the spot market even generated higher revenues than the PRL market, which offers storage system operators additional options for Arbitrage transactions opened up. The spot market benefited in particular from the rising spreads on the day-ahead and intraday markets, making battery storage systems an attractive addition to the traditional balancing power market.
Market alignment & factors influencing revenue development
The ongoing harmonization of the revenue potential for battery storage systems has given storage system operators more Flexibility in marketing and opened up new arbitrage opportunities in intraday trading. Various factors have favored this development:
- Rising volatilityIn intraday trading in particular, increased volatility enabled profitable arbitrage transactions that could be used effectively by storages.
- Fossil fuel pricesThe high fluctuation in fuel prices significantly influenced the daily electricity price spreads and thus the revenue potential of battery storage systems.
- Increasing competitionThe growing number of large-scale battery storage facilities in Germany increased competitive pressure, particularly in the PRL market. This increase in competition led to a convergence of prices on the PRL and spot markets and made electricity trading more profitable.
New index for battery storage revenues in the German market
A new Index now makes it possible to assess the economic viability of battery storage in the German energy markets. It records the revenues from electricity trading, PRL and SRL on a daily basis and provides insights into the average price development over the past year. Specific indices are currently available for one-hour and two-hour storage systems and current market trends. The calculation assumes up to two complete cycles per day with an AC/AC efficiency of 90 %. The various marketing options on the electricity market and the PRL and SRL markets are also mapped, as are a strategy combination and daily optimization.
The new index for battery storage revenues is based on the assumption that the optimal daily strategy is known and applied in advance. Therefore, the actual revenues could be lower in practice, as unpredictability and short-term market movements are not taken into account. Despite this background, experts consider the calculated revenues to be quite realistic.
Conclusion
The continuous rise in battery storage revenues since 2020 and the convergence of revenues in different markets underline the growing attractiveness of energy storage projects. The battery storage revenue index provides investors and project developers with important pointers for assessing and planning projects by enabling them to analyze potential revenues. The methodology of the index also allows project-specific adjustments, whereby factors such as efficiency, number of cycles and degradation can be taken into account. This transparency and adaptability supports informed investment decisions and helps to more accurately assess the profitability and viability of storage projects.