The energy revolution: How BESS-as-a-service drives greater renewables integration

BESS-as-a-service offers a needs aligned approach to energy storage adoption without the upfront capex costs, writes Lee Todd, Head of Sustainability Advisory Services, ABB Electrification Service.

This past January, the World Meteorological Organisation confirmed that 2024 was the world’s hottest year on record as we collectively breached the 1.5°C mark above pre-industrial levels.

All the while, fossil fuel consumption globally hit record highs the year prior and only continued to climb in 2024, accounting for almost 90% of all greenhouse gas emissions.

Across the globe, clear calls have been made to drive a transition to renewables, with the European Union alone looking to reduce its emissions by 55% and increase its share of renewables to 42.5% in the next five years.

Yet, despite this progress, one critical challenge remains: Intermittency. Unlike fossil fuel-based power plants, which generate electricity on demand, renewables rely on natural conditions.

Think about it: The sun doesn’t always shine, and the wind doesn’t always blow. This leads to critical mismatches between energy supply and consumption. Without effective energy storage, the power grid remains vulnerable to fluctuations which creates critical risks for businesses and industries that require reliable power.

To safeguard against this, it’s clear that energy storage systems are essential – but what’s the catch?

Understanding the limitations

Firstly, we need to bear in mind that renewable energy production is variable – solar generation peaks midday, while demand surges in the evening. On the other hand, wind energy may generate surplus power overnight when consumption is low.

Without energy storage, this excess electricity produced is wasted and grid operators instead need to rely on fossil fuel back-up power to meet demand spikes.

The issue is structural: Traditional energy grids were designed for a centralised system where power flows one way, from large-scale fossil fuel plants to end users. On the other hand, the shift to decentralised renewable energy sources has disrupted this model, introducing fluctuations in power supply that grids struggle to manage.

Since traditional grids lack the flexibility to absorb or store surplus energy efficiently, utilities are often forced to curtail renewable generation to prevent grid overload. For example, in 2023, Germany needed to curtail approximately 10.5TWh of energy to ensure grid stability which cost €3.1 billion ($3.2 billion). Not only is this curtailment costly, but it also impacts thousands of homes.

Without energy storage, businesses and industries must rely on grid supplied energy, which often comes from fossil fuel-powered peaking plants. This not only undermines decarbonisation efforts but also increases costs for end users.

Closing the stability gap

On the other hand, behind the meter battery energy storage systems (BESS) empower businesses to store excess renewable energy generated on-site and use it when needed, reducing dependence on the grid and ensuring greater energy security.

These storage systems help flatten demand peaks by allowing businesses to draw on stored energy during high cost periods, which reduces grid congestion and the likelihood of outages.

In 2022, over $5 million was invested in BESS, a threefold increase from the year before, with forecasts that the global BESS market will hit $150 billion by the end of this decade. There is a clear growing market recognition of the value of these systems, not to mention growing regulatory impetus to incentivise adoption.

Within the EU, the bloc offers funding for selected battery storage products through different financing facilities, including the Innovation Fund.

Yet, in spite of its advantages, BESS adoption has been slow due to high upfront costs, complexity in deployment and ongoing maintenance requirements.

Consider that ongoing capital expenditures (capex) account for the significant costs associated with implementing BESS. While global battery costs are coming down, this only represents a fraction of any project’s lifetime costs. For many businesses, energy storage has remained out of reach.

Taking control

However, novel business models can radically change the way businesses manage their energy assets. Through BESS-as-a-service, businesses are empowered to take better control of their energy needs to drive greater efficiency, productivity and resilience.

BESS-as-a-service creates value from day one, enabling cost savings and operational flexibility without significant upfront capex associated with traditional BESS systems. Through a subscription-based model, BESS-as-a-service radically changes the equation, making energy storage financially accessible to a broader range of businesses.

At the same time, businesses can then align their energy storage capacity with their actual needs, enabling them to optimise spending. Businesses can also discharge stored energy during peak demand times to avoid high demand charges.

Take transport and e-mobility. For EV charging stations, BESS-as-a-service can ensure that fast charging infrastructures don’t strain the grid during peak hours by storing energy in advance and discharging it when demand spikes.

At ABB, we worked with a client to implement BESS-as-a-service for their EV charging station which generated £69,000 ($87,000) in savings, as opposed to investing in an upgraded grid connection which would have been far more costly.

By removing financial and operational barriers, BESS-as-a-service accelerates energy storage adoption and helps create a more stable, renewable-powered grid. It democratises access to energy storage, allowing businesses of all sizes to benefit from cost reductions, sustainability improvements and energy resilience without the financial burden of ownership.

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Rethinking energy dynamics

it’s about scaling storage across industries to create a distributed energy network. For example, stored energy can be used not just for internal consumption but also for participation in demand response programmes, virtual power plants (VPPs) and grid services.

BESS-as-a-service creates new possibilities for businesses to maximise their energy assets while enabling a new financial resource for businesses to leverage – this allows them to concentrate on what they do best while driving innovation.

This shift towards a more interactive energy market transforms businesses from energy consumers into energy prosumers, who can sell excess stored energy back to the grid or participate in frequency regulation services.

By enabling widespread BESS adoption, we can decarbonise the grid faster, increase energy independence and ensure grid stability in an era of renewable dominance.

But to unlock the full potential of renewables, businesses need scalable, accessible and financially viable solutions. With it, we can hope to see a fully future-proofed, greener energy system.