Battery-as-a-service model gains ground in US

Meet the BESSaaS model. Under this approach, companies can access on-site, “behind-the-meter” battery energy storage by paying a subscription fee that negates the upfront expense of buying a battery.

“What you’ve seen in the last few years is really an increased focus on power system resilience as an operational imperative,” said Matthew Wise, vice president and head of strategy and business development at ABB Electrification Services. “Businesses that have historically focused their work on business resilience, business risk, and cybersecurity are now starting to think about their power systems in a similar way.” 

Wise said many customers don’t necessarily want an energy storage system of their own. Instead, they want the outcomes and the benefits of having a battery.  

That’s where BESSaaS comes in. He said service providers like ABB can work with customers to assess their needs, goals, and potential use cases to determine if it makes sense to install a battery, and if so, what kind.  

That third party then handles everything from system design and engineering, procurement, and construction to ongoing optimization and maintenance, including performance guarantees.  

Often, Wise said, customers enter a long-term contract lasting 15 to 20 years with the provider. 

“Rather than fronting up the capex [capital expenditure], having that exposure on their balance sheet and looking for the returns to come on over a longer time period, customers pay a quarterly subscription fee that they can book as opex [operational expenditure] as opposed to capex,” said Wise.

Day-one returns are the beauty of BESSaaS, Wise said.

“You can generate more revenue from energy markets and reduce cost by a greater amount than the actual quarterly fee of the battery,” Wise added.  

Beyond the revenue advantages and potential to engage in grid services like peak shaving, the model offers day-to-day operational security through performance guarantees and guaranteed power availability.   

Though heavy industries like steel and glassblowing first come to mind as prime contenders for BESSaaS, Wise said that some of the most common use cases he’s seen so far have surprised him.  

“We’ve found these interesting alternative opportunities,” he said, explaining that, in exploring alternatives to flaring methane, some oil and gas companies considered using the gas to power generators and sell electricity back to the grid. He said installing batteries as part of a BESSaaS system would let them turn those sites into flexible assets that can participate in the energy market.  

Other emerging applications include circumventing grid interconnection queues and powering data centers, electric vehicle charging hubs, and distributed [business] portfolios with over-sized solar generation capacity. 

As BESSaaS spreads, Wise said it will become a key part of the energy transition. 

“Batteries are the first step,” he said. “Then some PV comes along. But what about heat pumps, [grid] flexibility, or DC [direct-current electricity] charging?”  

“You can get sophisticated with this kind of approach,” he said.

From pv magazine USA.