LEI was engaged by an energy developer to develop a model to evaluate the merchant revenue streams (value stack) of a battery energy storage system. The engagement involved developing a versatile and dynamic modeling tool capable of estimating potential revenues originating from a wide variety of sources, including energy market arbitrage, selling various ancillary service products (such as regulation reserve, spinning reserve, etc.), capacity revenue in markets that renumerate provision of capacity, and other potential sources of income. The model was designed to analyze how participating in different revenue streams impacts the profitability of the storage system, and to evaluate existing trade-offs using different bidding strategies.
Similar engagements have been carried out for numerous transmission projects across New England.