AIIDA Energy advisory ESEN
Storage · BESS

BESS sizing and profitability studies

We define which battery to build and assess whether it is profitable and bankable: power, duration, technology and business case for stand-alone storage projects or storage co-located with solar PV and wind.

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What to expect

The optimal size is not the largest

Hybridising a solar PV plant with storage improves returns, but only if the battery is sized correctly. Beyond the optimum, the battery is underused and returns fall.

Real case, anonymised. Results depend on each project.

IRR uplift by battery size

Solar PV plant hybridised with a 4-hour BESS. IRR difference versus the PV-only plant.

0 bps+50 bps+100 bps+150 bps+200 bps+250 bpsPV only1:32:31:1BESS power / PV nominal power · 4-hour durationRecommended0+32+65+101+134+167+195+219+228+224+195 bps+127 bps
With grid-demand access (grid charging)Without grid-demand access

With grid-demand access, IRR keeps rising up to ratios close to 1:1. Without it, the battery cannot be fully charged in the months with lower irradiance and IRR falls beyond 2:3. The 2:3 configuration strikes the best balance between both scenarios.

The optimal BESS-to-PV ratio cannot be extrapolated: it depends on many variables, such as the solar resource, the PV technology, the COD year, the grid connection point, market prices or CAPEX. That is why every project needs its own study.

+195 bpsUnlevered IRR over PV only with the recommended configuration
+127 bpsSame configuration without grid-demand access (no grid charging)
±50 bpsIRR impact of a ±5% change in CAPEX
+61 bpsAdditional upside from the capacity market and voltage control

Where the revenues come from

Average BESS revenue split over its lifetime, by market. A diversified revenue stack reduces dependence on day-ahead arbitrage.

  • 60% Day-ahead (DAM)
  • 9% Intraday (IDAs)
  • 12% Balancing (mFRR)
  • 18% aFRR · power
  • 1% aFRR · energy

Unlevered (full equity) IRR, in real terms. Market prices from a reference provider, CAPEX from actual equipment and EPC quotations, and degradation guaranteed by TIER 1 manufacturers. bps: basis points.

How we approach it

From the grid connection point to the investment decision

  1. 01

    Starting point

    We analyse the point of interconnection (POI), the grid access capacity, the generation profile of the associated plant, if any, and the technical constraints that shape the design.

  2. 02

    Power and duration matrix

    We build matrices of configurations with per-scenario KPIs: energy delivered to the grid, clipping capture and POI saturation, equivalent cycles and throughput.

  3. 03

    Technology and degradation

    We benchmark TIER 1 equipment by round-trip efficiency (RtE), depth of discharge (DoD), degradation (SoH), cycle life and warranty terms, and define BOL/EOL sizing and the augmentation strategy.

  4. 04

    Techno-economic model

    We translate technical behaviour into revenues and cash: revenue stack by market (day-ahead, intraday and balancing services), long-term captured price using reference curves, IRR, NPV, payback and cash flows, with CAPEX and OPEX sensitivities.

Stand-alone or co-located

Two configurations, two risk profiles

A stand-alone BESS is connected to the grid on its own and earns its revenues from price arbitrage and balancing services. A co-located BESS shares the connection point and infrastructure with a renewable plant, which reduces connection costs and captures energy that would otherwise be lost.

Each configuration has a different risk, revenue and bankability profile. We analyse both to identify which one maximises returns given the site, the available POI and the developer's objectives.

What we deliver

  • Recommended power, duration and technology configuration, with its rationale.
  • Scenario matrix with technical and economic KPIs.
  • Techno-economic model: IRR, NPV, payback and cash flows.
  • Sensitivity analysis and main risks of the business case.
  • Executive report geared to the investment decision.

Why AIIDA

IndependenceTechnology-neutral, with no conflicts of interest.
End-to-endFrom feasibility and sizing through to EPC support.
Executive deliverablesActionable and to the point — not shelf-ware reports.

Frequently asked questions

On sizing and profitability

What does BESS project sizing involve?
BESS project sizing defines the optimal power (MW) and duration (MWh) of the storage system based on the grid connection point, the associated renewable generation profile and the target revenues. We work with power and duration matrices, assess clipping capture and POI saturation, and benchmark TIER 1 equipment by round-trip efficiency (RtE), depth of discharge (DoD), degradation (SoH) and cycle life to reach a technically and economically optimal configuration.
What does a storage profitability study include?
A profitability study translates the asset's technical behaviour into financial metrics: IRR, NPV, payback and cash flows, comparing the standalone scenario against the hybrid one. We model the long-term captured price using reference price curves, incorporate CAPEX and OPEX sensitivities, and quantify the potential upside in ancillary services. The aim is rigorous techno-economic modelling that supports the investment decision and the project's bankability.
How is battery technology selection approached?
Battery technology selection starts from a neutral, vendor-independent approach. We compare TIER 1 equipment by round-trip efficiency (RtE), depth of discharge (DoD), degradation curve (SoH), cycle life and warranty terms, and match them against the project's technical requirements and business case. The result is a technology recommendation aligned with the project's interest — not a supplier's — optimising performance, risk and cost across the asset's full life.

Do you have a storage project under study?

Tell us where your asset or portfolio stands and we'll come back with next steps.

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