Value Creation with Battery Energy Storage Systems and a Service-based Business Model Approach : A study of economic performance and business model opportunities for Battery Energy Storage Systems in high power machine applications

Abstract: Energy Storage Battery Systems (BESS) will have an important role in the transformation from conventional energy systems to the decentralized energy systems of the future with a larger share of renewable energy sources. At the same time, the high investment costs for batteries are a challenge to the development and transformation of the Swedish energy system. This study examines the technical and economic performance of a battery system in a case study, where it is connected to a waste vacuum machine with daily power peaks that are higher than the base demand. The purpose of the battery system is to combine it for peak shaving and for Svenska Kraftnät's market for grid services. This study also examines how a service-based business model, where the ownership of the battery is transferred to a third party, affects value proposition, value creation and value capture. The results from this study show that actual cost savings are realized through peak shaving as well as opportunities for revenue by offering the battery for grid services. Furthermore, scenario modeling shows on certain operational insights, that at a certain level of compensation for grid services, it is most profitable to perform as high peak shaving as possible. Offering the battery as a service is shown to provide additional benefits for customers and companies, while society and the environment benefit above all from the battery technology itself.