Rising geopolitical uncertainties, supply chain disruptions, fluctuating energy and operational costs compel businesses to revisit their plans for investment in energy. Concurrently, consumers and government policy makers and regulators are prompting businesses to generate and, or utilize power more efficiently and sustainably to ensure that a net-zero carbon future is within reach. Additionally, the increasing adoption of renewables, combined with growing concerns about grid stability, energy security and independence is spurring businesses to reimagine their approach to energy.

The shift from reliance on fossil fuels to electrification places an increasing reliance on electrified infrastructure – whether for managing power demand, generating and utilizing renewable energy, or supporting electric vehicle (EV) infrastructure. Consequently, many businesses have turned to on-site battery energy storage systems (BESS). BESS technology is a critical enabler of the energy transition as it allows businesses to store, manage, and deploy energy, intelligently [1]. ABB, with their extensive expertise and global presence, provides businesses with innovative BESS solutions, energy and asset management systems and AI-powered optimization tools. By introducing BESS-as-a-Service solution, ABB not only helps industries toward a sustainable future by reducing fossil-fuel reliance, aligning clean energy supply with demand, and optimizing energy consumption, ABB also allows businesses to take control of their energy and evolve from passive energy consumer to active prosumer while obviating the financial and operational risks of BESS ownership.

What is BESS anyway? Simply explained, BESS is the generic reference name for a system that stores energy in batteries that can be utilized at a later time. Traditionally, the system is comprised of batteries (usually lithium-ion batteries), a power conversion system, switchgear, transformer, protection and control system.

Typically, renewable energy sources are combined with a BESS to store energy during peak production time so it can be used when needed »01. Consequently, BESS addresses one of the main challenges of renewable energy generation and utilization: intermittency – the sun does not always shine and the wind does not always blow. By storing excess energy produced by variable energy resources, eg, wind and solar, BESS aligns energy supply with demand. Excess power is not wasted as it is stored. Use of cleaner energy during peak-demand times lowers reliance on fossil fuel back-up supplies from diesel-powered generators, reducing costs and emissions. In these ways, BESS helps to enable the efficient integration of renewables, thereby fostering the decarbonization of energy.

Powering investment with BESS

Adoption of energy storage solutions is already an integral part of furthering renewable energy capacity to reach targets. According to the International Energy Agency, (IEA) to triple global renewable energy capacity by 2030, 1,500 gigawatt (GW) of energy storage will be required, which includes 1,200 GW from batteries [1]. In line with the IEA, some governments have created policies to encourage battery storage deployment eg, establishing targets, subsidies and reforms that obviate barriers and improve access to markets [1]. Moreover, the European Union (EU) aims to deploy 45 GW of storage by 2030.

An examination of global investment in battery storage capacity over the past decade demonstrates an exponential rise, from about one GW in 2013 to over 85 GW in 2023. This trend has been spearheaded by China, the EU and the United States over the past five years and accounts for almost 90 percent of the capacity added in 2023 [1]. In 2023 the global energy storage market almost tripled to 45 GW; and in 2024 it has been predicted to add 100 GWh of capacity driven mainly by China [2]. Indeed there is a strong business case for investing in BESS for the future. Over US $ 5 million was invested in BESS in 2022, a threefold increase from the previous year. The global BESS market is expected to hit US $ 150 billion by 2030 [3].

Benefiting from BESS

With the proliferation of renewable energy, BESS is becoming an important technology for industrial and commercial uses. In addition to steadying the flow of energy independent of weather conditions, BESS can protect users from supply interruptions while allowing them to avoid high tariffs, reduce operational costs and reduce dependency on the grid and enhance resilience. While utility-scale businesses, or front-of-the-meter (FTM) installations are the largest investors in BESS, commercial and industrial (C&I) customers, and behind-the-meter (BTM) installations, account for the second-largest investment subsegment and are predicted to reach up to 70 GW-hours (GWh) in annual additions by 2030 »02 [2,3]. This important business subsegment comprises mainly EV charging infrastructure, critical infrastructure eg, telecommunication towers, data centers, and hospitals as well as public infrastructure buildings and factories. Given the many benefits, ever more industrial and commercial businesses are turning to BESS.

BESS as-a-Service

Despite the advantages, the conventional BESS ownership model requires significant up-front capital expenditure, a high technical competence that necessitates in-house experts and is associated with complex maintenance challenges. These issues pose obstacles to BESS adoption for many businesses, thus impeding energy and cost optimization, carbon reduction goals and the shift to renewables to achieve net-zero carbon goals. In response, ABB has released BESS-as-a-Service in 2025. This service model allows businesses to reap the benefits of BESS without the burdens associated with BESS ownership, whether financial or operational.

For BTM customers that already utilize variable energy sources and those that are planning to invest in renewables, this innovative service solution is ideal. Such facilities only require a space the size of two parking spots to implement the BESS »01. ABB manages everything from design, to lifecycle recycling, and includes installation, maintenance, monitoring, and optimization [4].

BESS as-a-Service reduces risks

ABB’s service solution eliminates the need for up-front capital expenditure »03. Moreover, ABB as a single provider and manager ensures that all scoping, capital works, installation operations and maintenance is in the hands of ABB, removing the need for in-house experts and multiple suppliers. The software solution for BESS asset monitoring and management leverages AI capabilities, thereby helping to monitor the health condition of the entire system. If some aspect is not working properly, the system acts rapidly to restore function guaranteeing the performance of the system. ABB’s digital solution for monitoring and management is scalable and guaranteed for the life of contract »03.

Because ABB manages every aspect of BESS, BESS-as-a-Service eliminates the financial risks associated with ownership, thereby reducing business expenditures from downtime or technical problems. Moreover, businesses no longer need to account for asset depreciation over time nor are they burdened with end-of-lifecycle battery system recycling, as they do not own the BESS system. And, because energy projects are backed by service-level agreements with performance guarantees, risks are further reduced »03.

03 BESS-as-a-Service

ABB provides

• BESS hardware: including battery system, power conversion system, switchgear, transformer, protection and control system.
• BESS software: A comprehensive energy and asset management platform combined with an intelligent optimization solution for seamless energy market participation.

ABB responsibilities

• Installs BESS on the customer’s site, including any required CapEx.
• Ongoing maintenance and optimization of all BESS equipment by ABB experts for the life of the contract.

ABB guarantees

• ABB provides performance and availability guarantees for the whole BESS system for the duration of the contract.
• ABB guarantees: a revenue floor for the duration of the contract, tailored to the specific value streams of each project. 

Optimizing energy and fostering resilience

In addition to lowering financial and operational risks, BESS-as-a-Service allows businesses to optimize their energy assets. By aligning their energy storage capacity with actual needs, and discharging stored energy during peak demand times, they optimize and avoid high demand charges, respectively. Storing energy during off-peak times reduces reliance on carbon-intensive grid power. This grid support and lower operational carbon use enables customers to harmonize their corporate sustainability goals with global decarbonization targets. Moreover, with the inclusion of ABB’s asset and energy management platform, BESS-as-a-Service not only optimizes energy consumption and reduces unwanted emissions, the combined solution enables a data-led approach to optimize energy efficiency, performance, and reporting, which can be combined with energy market data to adjust strategies in real-time.

The rising frequency, intensity and duration of extreme weather events, ranging from heat domes to polar vortices, is prompting concerns over grid resilience and the stability of renewable sources [4]. Because BESS-as-a-Service decentralizes energy, businesses are able to mitigate grid constraints and enhance supply resilience. And by addressing the intermittency of renewable energy sources, BESS-as-a-Service ensures an extremely stable and reliable clean energy supply, generating energy resilience while guaranteeing use of low-emission energy solutions. Overall, BESS-as-a-Service allows businesses to take better control of their energy needs to drive greater efficiency, productivity, and resilience as they steer toward decarbonization.

Monetizing storage

Adding to its advantages, BESS-as-a-Service allows customers to benefit from revenue streams, energy arbitrage, peak shaving, and power smoothing. For sites that already benefit from renewable energy generation, BESS-as-a-Service offers the opportunity to trade clean energy back to the grid. Excess energy can be used to generate new revenue streams such as EV charging facilities. And, by providing fast-response frequency regulation, voltage support and spinning reserve, BESS-as-a-Service enables businesses to monetize their energy storage assets.

With a BESS-as-a-Service, businesses can purchase and store electric energy when rates are low, and trade it back to the grid when prices rise. This energy arbitrage also helps businesses mitigate price volatility. Companies will also benefit from peak shaving: During high-demand periods, electricity from BESS is used to supply part of the load and shave off the peak of the demand curve, reducing the total power consumed from the grid. During low demand or low cost periods the BESS is charged. Such practices allow businesses to reduce energy bills and evade demand charges. Power smoothing capability is also enhanced since voltage spikes are better absorbed and compensated for in real-time, thereby stabilizing electricity supply fluctuations and ensuring consistent power delivery, optimizing efficiency, etc. »03.

Coupling algorithms with BESS-as-a-Service

Clearly, ABB’s BESS-as-a-Service does much more than store energy: Benefiting from two decades of energy data, advanced algorithms and machine learning models form the intelligent foundation that allows businesses to predict energy prices, demand, as well as grid conditions. This offering empowers customers to successfully navigate the ever-changing energy landscape.

In 2024, ABB expanded their intelligent energy capabilities by investing in advanced energy analytics and optimization innovators such as the cutting-edge companies: GridBeyond and Ndustrial »04. These strategic partnerships foster asset performance optimization, open up new revenue streams and enhance operational resilience.

By integrated innovative capabilities into ABB’s BESS-as-a-Service, customers benefit from real-time optimization of their battery system based on the individual site demand, as well as market signals and grid dynamics. With intelligence at the core of this service solution, ABB ensures that their customers can take advantage of energy decision automation, energy market participation, and optimize across microgrids, tariffs, as well as process automation systems for more profitability and better grid resilience as they transition to a net-zero future.

Business pilot studies

ABB has initiated feasibility studies for BTM BESS with a variety of C&I customers in a first step toward helping them reach their energy asset and strategy goals. In one business case a Scottish car dealership aiming to offer EV charging to overcome existing grid limitations was conducted. ABB examined a BESS-as-a-Service business solution to see if existing power limitations could be augmented using BESS-as-a-Service. In this business study the company could generate savings compared to what would be expended if they invested in an upgraded grid connection to resolve their issues instead.

In another business case, a feasibility study was conducted for a UK commercial business park to evaluate whether ABB’s BESS-as-a-Service could enhance the economic return of an existing solar energy source. The result was compelling, an 80 percent reduction in energy costs and an additional revenue stream were unlocked through participation in ancillary services and energy trading.

The results of the aforementioned business cases indicate that by offering BESS-as-a-Service, ABB empowers businesses to take control of their energy to achieve energy independence, mitigate financial and operational risks, while accessing new revenue streams – an added value in changing energy markets and uncertain geopolitical times

References
 

IEA, “Rapid expansion of batteries will be crucial to meet climate and energy security goals set at COP28”, IEA News 25 April 2024, Available: https://www.iea.org/news/rapid-expansion-of-batteries-will-be-crucial-to-meet-climate-and-energy-security-goals-set-at-cop28

G. Jarbratt, et al., “Enabling renewable energy with battery energy storage systems”, McKinsey, 2 Aug. 2023, Available: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/enabling-renewable-energy-with-battery-energy-storage-systems

N. Nsitem, “Global Energy Storage Market Records Biggest Jump Yet”, in Bloomberg NEF, 25 April 2024, [Online].

G.P. Guddanti et al., “A Comprehensive Review: Impacts of Extreme Temperatures due to Climate Change on Power Grid Infrastructure and Operation”, in Electrical Engineering and System Science; Systems and Control, Dec. 2024, Available: https://arxiv.org/abs/2410.08425