Post: Why forecasting alone won’t unlock the full value of your battery

Why forecasting alone won’t unlock the full value of your battery

The most common misconception about battery energy storage is that the key to revenue is predicting the price. If you can call the peak, you can position your asset to capture it. But the real picture is more complicated, and the gap between what a battery earns under a basic day-ahead-only strategy and what a well-optimised asset can generate is substantial.

In this article we spoke to GridBeyond Director of Origination Scott Berrie explore why the real edge for battery owners and operators is not prediction. It is positioning.

“Battery storage is one of the most technically and commercially complex asset classes in the energy transition. The difference between a battery that performs and one that underperforms often comes down not to the asset itself, but to the intelligence applied to it”, said Berrie.

Beyond the day-ahead

Most revenue projections for battery storage assets are anchored to the day-ahead auction. An operator sells a profile, the battery follows it, the revenue is logged. The problem with this approach is that it captures only a fraction of what the asset is capable of generating.

Markets evolve continuously in the hours between day-ahead commitment and delivery. A large thermal generator trips, an interconnector fails or wind output doesn’t meet forecast levels. In each case, intraday prices shift, but an asset that has already sold its profile at the day-ahead stage and done nothing since has no way to benefit from those movements. An asset that has been actively managed across the intraday continuous market, the ancillary services stack and the Balancing Mechanism is a different proposition.

This multi-market approach is where the meaningful performance differences between battery operators emerge. Across wholesale-only operation, the uplift from active intraday optimisation relative to a day-ahead-only benchmark can exceed 50%, with the range varying considerably.

Berrie said: “At GridBeyond, this is the foundation of how we operate. Our AI-driven optimisation platform monitors asset positions continuously and re-optimises across every available market window, executing trades algorithmically. Every charge and discharge cycle is evaluated not just against the current best price but against the full range of outcomes that might emerge between now and delivery.”

Ancillary services, the balancing mechanism and what comes next

A significant share of battery revenue still flows through ancillary services markets. Dynamic containment, dynamic regulation, and other frequency response products have provided a relatively accessible revenue stream for the current fleet, particularly for shorter-duration assets. But the picture is changing.

As installed battery capacity grows faster than ancillary services demand, the clearing prices in those markets will continue to come under pressure. The fleet that thrives in the next phase of the market will be the one that has invested in wholesale trading capability. The Balancing Mechanism is also becoming an increasingly important channel, with the system operator dispatching batteries in merit order more frequently as the installed base grows.

“GridBeyond’s optimisation approach is designed with this trajectory in mind. We already operate across all major market windows in GB and Ireland, with the same principle applying to our North American markets. As the revenue mix shifts, our clients’ assets are positioned to follow the value wherever it sits”, said Berrie.

Offtake structures and revenue certainty

For asset owners seeking greater revenue predictability, whether to satisfy debt finance requirements or to manage equity risk, the market for offtake products has matured considerably. Floors, tolls and day-ahead swaps each serve a different purpose and sit at different points on the risk/return spectrum.

A floor sets a minimum revenue level, providing the downside protection that project finance lenders typically require. A toll goes further, locking in revenue closer to the base case over a shorter period, giving asset owners a smoother revenue profile while still allowing the optimiser to capture upside. Day-ahead battery swaps offer a more liquid, shorter-term fixing mechanism.

GridBeyond works with asset owners to structure commercial arrangements that fit both their financing needs and their risk appetite. Berrie explained: “the right structure depends on the asset, its duration, its location and its expected revenue mix. What matters is that any commercial arrangement is built on a solid understanding of how the underlying revenue is generated, market by market, and not simply extrapolated from a single day-ahead benchmark.”