The strategic imperative for creating resilience and robustness in Europe's evolving energy landscape, by scaling decentralized batteries behind the meter with Battery-as-a-Service

Within the European energy sector, the paradigm is shifting toward sustainability and adaptability, where the intermittent nature of renewable sources such as wind and solar power increase in the European energy mix. Furthermore, we see this modern energy landscape facing several vulnerabilities, including natural disasters and cybersecurity threats. This has accentuated the role of decentralized batteries in the pursuit of a resilient and robust energy system. Decentralized batteries, placed behind the meter, have a multifaceted role. These assets offer diverse applications and can harmonize energy supply and demand as one important contribution to creating long-term grid stability.

Behind the meter – the creation of a sustainable value proposition

The diverse applications of batteries placed behind the meter make them more than mere grid-stabilizing devices. They are versatile tools with a multitude of applications. A positive financial aspect of decentralized batteries resides in their potential to curtail the necessity for costly grid upgrades. Through the localized optimization of energy storage, these batteries can defer capital-intensive investments in transmission and distribution infrastructure. This, in turn, translates into substantial cost savings for utilities and consumers.

A battery placed behind the meter also builds a long-term value both for the asset owner and the energy system as a whole. This since the batteries are placed where they can create several different value streams for their owner. The utilization of the batteries can be monitored and thus controlled to create the best value during each given point in time over the full lifetime of the system.​

Energy resilience. Behind-the-meter batteries provide backup power during grid outages. This resilience is especially valuable in regions prone to volatile weather events, grid instability, or frequent blackouts. Businesses and industries can maintain essential operations, reduce downtime, and avoid financial losses during power disruptions.

Energy cost reduction. By storing electricity during low-cost periods and using it during high-cost periods, behind-the-meter batteries can help users save money on their energy bills. This can lead to significant long-term cost reductions, improving the overall value proposition.

Managing peak demand. Electricity demand varies throughout the day, with peak demand periods being more expensive for utilities and industries. Behind-the-meter batteries can store excess energy during low-demand periods and discharge during peak times, reducing electricity bills through demand charge management and time-of-use optimization.

Increased self-consumption and energy optimization. As renewable energy sources like solar and wind become a larger part of the energy mix, the intermittent nature of these sources creates grid stability issues. Behind-the-meter batteries can store excess renewable energy generated during the day and release it when needed, making renewable energy more reliable and enhancing its value.

Energy independence. Behind-the-meter batteries can reduce dependence on the grid and decrease vulnerability to energy supply disruptions. This independence can be crucial for businesses and critical infrastructure in remote or unstable areas.

Grid support and grid decentralization. Behind-the-meter batteries can provide grid services, such as frequency regulation, voltage support, and grid capacity relief. These services help stabilize the grid, in some cases reduce the need for costly grid infrastructure upgrades and promote grid decentralization by enabling distributed energy resources.

Increased property value. Industries and businesses equipped with behind-the-meter energy storage systems may see an increase in property value. Potential buyers and tenants may find the added resilience and energy cost savings attractive.

Incentives and regulations. Many governments offer incentives, tax credits, or rebates for behind-the-meter energy storage installations. That is, pure taxonomy-related advantages when installing battery systems in properties and industries. These financial incentives can improve the return on investment and enhance the long-term value proposition.

So, these behind-the-meter assets are like Swiss Army knives for the energy sector, adapting to a range of roles, from stabilizers to problem-solvers.

Empowering independence and making decentralized batteries “every person's asset”

Decentralized batteries empower energy consumers with unprecedented control over their energy utilization and expenditures. When combined with intelligent energy management systems, these batteries enable consumers to engage in demand response markets, tailoring energy consumption to price signals, and even redistributing excess energy to the grid.

However, when we evaluate value for money regarding these assets, being part of our most sensitive infrastructure, we often end up discussing asset cost rather than quality, robustness, and security.

It needs to be understood that investing in a battery system demands both technology insight and deep market knowledge, which is not necessarily possessed by general industries and business owners. Thus, an asset that suddenly has become critical for the operation of facilities and building strong businesses lies far beyond the knowledge horizon of the buyer. It takes deep technical knowledge to understand what gives the most value for money during the lifetime of these assets. Another aspect is what technology is judged to be secure for this utilization, considering all software being built into sensitive steering mechanisms of the systems, managing how and when they should operate.

This is why Battery as a Service" (BaaS) is considered a logical, strategic and innovative solution. It offers a smart and pragmatic approach to energy storage by providing cost-effective, scalable, and risk-mitigating solutions. It leverages the expertise of service providers to optimize battery performance, encourages sustainability, and promotes wider adoption of energy storage technologies.

BaaS allows businesses and industries to access the benefits of energy storage without the high upfront costs of purchasing batteries. It creates energy storage accessibility to a broader range of consumers, including residential, commercial, and industrial users.

Users merely pay for the service on a subscription or pay-as-you-go basis, which can make it more affordable and accessible. This means speeding up the deployment of the batteries since technical risks do not have to be considered for the industry or facility that provides space for installation.

Owning and maintaining batteries also comes with operational and maintenance risks, including degradation over time. BaaS providers assume these risks, ensuring that users have access to well-maintained and optimized battery systems. BaaS providers also have specialized knowledge and expertise in energy storage technology. They can monitor the performance of battery systems in real-time, optimizing their operation and efficiency, providing grid services like peak shaving, load balancing, and frequency regulation, contributing to grid stability and reliability.

BaaS providers typically offer scalable solutions, allowing users to adjust the capacity of their battery systems as needed. This flexibility is especially valuable for businesses and utilities that may need to expand their energy storage capabilities over time.

Geopolitical significance

Energy is a fundamental driver of economic activity. Ensuring a secure and affordable energy supply is critical for economic stability. A reliable energy supply is essential for a country's national security reducing the risk of disruptions to critical infrastructure, which can have cascading effects on other sectors, including defense, transportation, and healthcare.

Energy independence also provides countries with greater flexibility in responding to international crises or conflicts. Nations can adjust their energy policies and supplies to align with their domestic interests and foreign policy objectives.

In the current geopolitical climate, energy security and autonomy have assumed paramount importance. Europe's quest for energy independence is tied to the diversification of energy sources and the resilience of its grid. Building critical infrastructure regardless of industry entails a responsibility to ensure robustness and resilience throughout the value chain and take geopolitical factors and flows into account.

Decentralized batteries facilitate this journey by reducing reliance on external energy suppliers and enhancing domestic energy production. These distributed assets, correctly placed in the grid infrastructure, can seamlessly assume load, sustaining the operation of critical infrastructure when the central grid faulters.

Furthermore, as battery systems are clearly becoming a more critical component of our energy systems, countries develop dependencies on specific technologies, materials, or supply chains. This will create vulnerabilities if supply chains are disrupted or if certain countries gain significant control over critical battery materials, potentially leading to geopolitical tensions.

Summary

The European energy landscape stands at a critical juncture where decentralized batteries emerge as a transformative and indispensable solution. They mitigate renewable energy variability, fortify grid resilience, alleviate infrastructure costs, empower consumer independence, and contribute to decarbonization efforts.

Decentralized batteries have emerged as one important component upon which Europe can continue building a resilient and robust energy system. The incorporation and assimilation of these assets into our energy infrastructure are not mere options, but rather a necessity as we strive towards the climate goals set out, both on the European agenda as well as globally.

As decentralized batteries continue to diversify energy applications, become financially attractive investments and contribute to energy autonomy in a shifting geopolitical landscape, they serve as both the enablers and protectors of a sustainable, resilient energy future.

Battery-as-a-service (BaaS) eliminates the need for large upfront investments, accelerates the adoption of energy storage, and supports the integration of renewable energy sources, improving grid reliability and sustainability.

Creating energy independence for European countries by utilizing decentralized batteries as one of many enablers is critical since they enhance security and resilience, accelerate the integration of renewables, reduce transmission losses, and promote local economic and environmental benefits.