Economic assessment of standalone battery energy storage factoring operational and market participation aspects: A case study in Greece

The proliferation of renewables in power systems necessitates the widespread deployment of Battery Energy Storage Systems (BESSs) to mitigate variability and unpredictability. This work introduces a concise methodology for the comprehensive economic assessment of standalone BESSs, integrating critical factors overlooked in previous studies, which ensure high precision. On the expenditure side, a model was developed to estimate capital expenditures (CAPEX) and operational & maintenance (O&M) costs for any power-duration (MW-h) combination while accounting for economies of scale. Crucially, the methodology incorporates the cost and volume of required capacity augmentation based on the BESS's actual daily operational profile. Revenue estimation considers multiple operating scenarios across varying daily cycling ranges, factoring imperfect foresight in Energy and Balancing Markets. The inclusion of potential governmental subsidization further refines the financial modelling. The methodology enables the calculation of essential financial indicators, including Net Present Value (NPV), Internal Rate of Return (IRR) and Levelized Cost of Storage (LCOS). Applying it to real-world data from the Greek power market reveals distinct trends: for subsidized BESSs, IRR and LCOS increase with their auction bids, while NPV is primarily influenced by their dimensions. Conversely, for non-subsidized BESSs, their dimensions emerge as the dominant factor for all metrics. Future research will extend this analysis to diverse market structures and energy mixes to determine the generalizability of these conclusions. This comprehensive approach provides stakeholders with a robust tool for evaluating the long-term viability of battery storage investments in evolving energy landscapes.