Under the dynamic electricity pricing scenario, how can we make C&I ESS become a gold-digging tool for investors

  Amidst the global energy transition, industrial and commercial energy storage(C&I ESS), as a crucial link connecting renewable energy and electricity demand, is emerging as a new choice for enterprises to achieve green and low-carbon development. In the current application scenarios of C&I ESS, the vast majority of these systems utilize the smart electricity consumption model of "peak shaving and valley filling", leveraging the price difference between peak and off-peak electricity to reduce electricity costs for enterprises and enhance energy efficiency. Furthermore, in the context of dynamic electricity pricing in Europe, industrial and commercial energy storage systems, as an increasingly significant component of the energy mix, have become a gold-digging tool in the eyes of energy investors due to their characteristics of accessibility and flexibility in this electricity price storm.

I. Composition of industrial and commercial energy storage

  As an important component of modern energy management, C&I ESS are being widely applied globally. They not only assist businesses in optimizing electricity costs but also enhance grid stability and play a pivotal role in the integration of renewable energy. C&I ESS primarily consist of the following key components:

(1) Battery system: The battery is the core of the energy storage system. Currently, lithium iron phosphate (LFP) is the mainstream choice due to its high energy density, long cycle life (typically over 6000 cycles), and safety, making it the preferred choice for industrial and commercial applications.

(2) Battery Management System (BMS): The BMS is responsible for monitoring the battery status, including voltage, temperature, SOC (State of Charge), and SOH (State of Health), ensuring that the battery operates within a safe range and prolongs its service life.

(3) Energy Management System (EMS): EMS serves as the "brain" of the energy storage system, responsible for optimizing charging and discharging strategies, achieving peak-valley arbitrage, demand management, backup power supply, and other functions. Advanced EMS can also work in coordination with renewable energy systems such as photovoltaic and wind power systems.

(4) Power Conversion System (PCS): The PCS converts between AC and DC power, enabling batteries to interact with the grid or load. Industrial and commercial energy storage typically employs bidirectional inverters, which support flexible switching between charging and discharging modes.

(5) Thermal management system: Ensures that the battery operates at an optimal temperature, preventing overheating or overcooling that could affect performance and lifespan. Liquid cooling and air cooling are two mainstream solutions, with liquid cooling being more suitable for high-power scenarios.

(6) Safety system: including fire-fighting devices (such as perfluorohexanone or hot aerosol fire extinguishing), smoke detection, and insulation monitoring, to ensure the system can be safely shut down in extreme situations.

II. How to make C&I ESS truly become a "value creation engine" for enterprises

  C&I ESS is far more than a simple "power bank"; it is a strategic asset capable of reshaping the energy value chain of enterprises. This article will systematically elaborate on the path through which energy storage systems create real value for enterprises, accompanied by a practical implementation framework and quantitative evaluation tools.

2.1 Revenue model I of industrial and commercial energy storage - peak-valley arbitrage

  Peak-valley arbitrage is a common and important revenue model for industrial and commercial energy storage - it utilizes the price difference between peak and valley electricity prices on the grid to store electrical energy during low-price periods and release the stored energy during high-price periods for industrial and commercial users. This reduces the need to purchase electricity at high prices during peak periods, lowers electricity costs, and generates revenue through the price difference.

  Assuming that the low-peak electricity price in a certain region is 0.1€/kWh and the high-peak electricity price is 0.5€/kWh, the energy storage system charges 1000 kWh during the low-peak period and discharges all of it during the high-peak period for the enterprise's own use. The electricity cost saved through peak-valley arbitrage is (0.5-0.1)×1000=400 €. If factors such as the charging and discharging efficiency of the energy storage system are taken into account, the actual benefit may vary slightly.

2.2 Revenue Model 2 for C&I ESS - Demand Management

  Demand management, as a crucial revenue model for industrial and commercial energy storage, relies on the flexibility of energy storage systems to regulate electricity and achieve cost reduction and efficiency enhancement. According to the electricity department's regulations on user demand charges, the energy storage system can reasonably adjust electricity load to avoid exceeding the approved demand, reduce high demand electricity expenses, and thereby generate revenue. Before predicting that the electricity load will exceed the approved demand, the energy storage system releases electric energy to supplement part of the electricity demand and smooth the load curve.

  Assuming that a certain enterprise's approved demand is 1000 kW, and the excess demand electricity rate is 10 yuan/kW, if the demand reaches 1200 kW without using an energy storage system and is controlled within the approved value after use, a one-time saving of (1200-1000)×10 = 2000 yuan can be achieved.

2.3 Revenue Model Three for C&I ESS - Demand-Side Response

  Demand-side response is an innovative revenue model for C&I ESS that interact with the power grid. It obtains economic returns by flexibly adjusting electricity usage behavior and helps ensure the stable operation of the power system. When there is a tight supply and demand of electricity or when the system needs adjustment, the power grid company issues a demand response signal. C&I ESS change their charging and discharging strategies according to the signal, reduce electricity usage or supply electricity to the grid, alleviate power pressure, and thereby obtain corresponding compensation.

2.4 Revenue Model 4 for C&I ESS - Participating in Spot Trading in the Electricity Market

  Participating in spot trading in the electricity market is a revenue model for C&I ESS to profit based on electricity price fluctuations, which can fully leverage the flexible regulation characteristics of energy storage. The electricity spot market reflects the relationship between electricity supply and demand in real time, with prices fluctuating over time. This characteristic requires energy storage systems to have high responsiveness and scheduling flexibility, enabling them to charge when electricity prices are low, discharge when prices rise, and sell the electric energy back to the market, thereby earning profits from price differences. Essentially, it is based on optimizing energy storage charging and discharging strategies based on market price signals to achieve revenue.

  The energy storage system monitors the price trend of the electricity spot market in real-time, and, taking into account its own operating status and charging/discharging capabilities, purchases electric energy for storage during periods of low electricity prices. When the market electricity price rises to a certain level and meets its own charging/discharging constraints, the stored electric energy is released onto the market for sale. This series of operations requires the energy storage system to possess a superior energy management system with dispatchable capabilities, enabling unified deployment and management of energy.

2.5 Revenue Model Five for C&I ESS - Participation in Ancillary Services

  Participating in ancillary services is an important way for C&I ESS to tap into its own regulation potential and obtain diversified benefits. In the operation of the power system, various ancillary services are required to ensure power quality and system stability. C&I ESS, with its characteristics of rapid response and flexible regulation, participates in ancillary services such as peak shaving, frequency regulation, and reserve, compensating for instantaneous imbalances in power supply and demand, maintaining stable system operation, and obtaining corresponding service fees.

  The scale of demand for ancillary services from the power grid, market price standards for different services, response speed and continuous regulation capability of energy storage systems, as well as the maturity of regional ancillary services markets, all significantly affect the benefits of industrial and commercial energy storage participating in ancillary services.

2.6 Revenue Model of C&I ESS VI - Renewable Energy Consumption

  New energy consumption represents a revenue model that combines C&I ESS with the development trend of green energy. It not only facilitates the utilization of clean energy but also yields economic returns. When there is excess power generation from new energy sources (such as photovoltaic and wind power), the energy storage system stores the excess electricity to avoid the phenomenon of curtailing wind and solar power. When there is insufficient new energy generation or peak electricity demand, the stored electricity is released to achieve smooth output and efficient utilization of new energy, thereby generating revenue.

  The stability and variability of new energy power generation, the capacity and efficiency of energy storage systems, as well as the intensity of relevant policy subsidies, all directly affect the profitability of new energy consumption models.

III. Selection of C&I ESS products

  Based on the above discussion, regardless of the revenue model chosen by enterprises or investors, a flexible, efficient, and stable energy storage system is required as the mainstay. It should provide the operator with an appropriate amount of energy storage, efficient and stable power conversion equipment for power output, and an intelligent and comprehensive energy management system for operation. Each component must be optimized to form an excellent energy storage system product.

  Inventronics has launched 60kW/100kWh and 120kW/232kWh photovoltaic and energy storage integrated C&I ESS products. The key components are designed with modularization (PCS, MPPT, STS), featuring flexible expansion, high efficiency, and stability. Equipped with an efficient temperature control system, it ensures stable battery performance and prolongs battery life. Supporting optional MPPT and STS configurations, it can meet various application scenarios such as photovoltaic, diesel generation, and energy storage, and supports both grid-connected and off-grid applications.