Market-driven battery storage delivers major economic gains, study finds

Large-scale battery storage systems deliver a positive macroeconomic effect even when operated purely on market price signals. A study by consultancies Neon Neue Energieökonomik and Consentec found that market-driven charging and discharging reduces overall system costs and price volatility. By enabling higher integration of wind and solar power, these assets also contribute to climate goals.

The research, commissioned by Kyon Energy, Lichtblick, Eco Stor, and Fluence, notes that while market-driven operation benefits the broader energy system, it does not currently provide a systematic reduction in grid costs. This is because storage operators lack economic incentives to address local grid bottlenecks. In essence, there is no financial reward for fixing “traffic jams” on the power lines, so benefits are being left on the table.

The authors warn that current regulatory proposals intended to increase “grid-serving” behavior, such as flexible connection agreements, dynamic grid fees, or operational restrictions, could backfire. The study suggests that a “patchwork of regulatory measures” risks creating high costs with little benefit, potentially stalling necessary storage expansion.

Neon and Consentec advocate for “system-serving” frameworks rather than isolated grid goals. Recommended adjustments to power market design include time- and location-variable price signals, standardized nationwide connection rules, and market mechanisms that properly remunerate behavior that supports both the market and the grid.

“The results speak a clear language: battery storage is a win for the entire electricity system,” said Lion Hirth, founder and managing director of Neon. “The decisive factor now is to adapt the regulatory framework so that the grids benefit even more.”

The experts argue that restrictions on short-term marketing or rigid operational requirements significantly reduce the market flexibility of batteries. They conclude that the resulting loss of macroeconomic benefits could outweigh any potential local grid advantages.

From pv magazine Germany.