Profitability
How we increase the profitability of your battery
At CheckWatt, we increase the value of your battery by making it available to different services and markets and optimizing between them. This means that the battery, based on forecasts, is used for what is considered most profitable at the time. For example, it can be to stabilize the electricity grid, or to optimize the discharge of solar electricity or electricity charged at low hourly prices.
Increased revenue with Virtual Power Plant
Smart control via CheckWatt in SE3 is
3.6x more profitable
In comparison to a battery system that only performed smart energy price control and stored solar energy in electricity area 3.
Smart control via CheckWatt in SE4 is
1.6x more profitable
In comparison to a battery system that only performed smart energy price control and stored solar energy in electricity area 4.
Here, revenue is compared for a 10 kW/10 kWh battery system with different dispatching during the period July to October 2024. In one case, the system has delivered ancillary services via CheckWatt, and in the other cases, the battery has been used to store its own solar electricity and performed electricity price control where the battery charged at low electricity prices and discharged at high prices. The revenue for CheckWatt control is calculated after fees and safety margins in bidding for ancillary services. For the value of saving solar electricity and electricity price control, we have assumed average tariffs for electricity grids, tax reduction and grid benefit and that the customer has hourly price contracts. In this case, we have modeled the compensation in electricity areas 3 and 4. In electricity areas 1 and 2, the increased value with CheckWatt's control is higher because electricity prices are lower and less volatile, resulting in lower savings from hourly price control.
We make your battery even more versatile
A battery is versatile and its value creation can be divided into a few different categories. It can be used to smooth out price differences in different electricity markets and provide ancillary services to Svenska kraftnät to ensure that the electricity system is in balance. It can also be used to provide flexibility in a local electricity network during the hours it is most strained. There are also a number of benefits that the battery can create locally in a building, such as storing solar power or peak shaving. By connecting to CheckWatt's services, you open up to utilize and create value from all these areas of use.
Electricity system services
Electricity and ancillary services markets
To ensure that the electricity system is always in balance, Svenska kraftnät purchases various types of ancillary services. For example, batteries in CheckWatt's virtual power plant Currently contribute to maintaining the frequency during operational disturbances through the support services FCR-D up and down and FCR-N. For larger resources with local frequency meter, FFR is also delivered. In the future, batteries in CheckWatt's virtual power plants will also be able to deliver the ancillary services mFRR and aFRR. Although FCR-D and FCR-N in particular have fallen in price as a result of the rapid expansion of batteries, ancillary services are generally still the most profitable area of use for batteries.
Batteries can also take advantage of electricity price differences in different electricity markets. In countries such as Germany and the UK, which are further along in their battery deployment, revenues from ancillary services have been complemented by significant revenues from arbitrage in electricity markets - charging the battery when electricity is cheap and discharging to use the electricity yourself or to sell it when electricity is expensive. Volatility in Sweden has so far been lower than in Central Europe, but it is expected to increase in the future as more solar and wind power is built and the Nordic electricity system becomes more interconnected with other countries.
CheckWatt currently delivers the ancillary services
FFR, FCR-D and FCR-N
In the future also
mFRR and aFRR
Value of delivering different ancillary services on the spot price market over the period 1 November 2023 to 31 October 2024 for a 1 MW/1 MWh system is shown. Until summer 2024, FCR-D was usually the most profitable ancillary service. Since then, other ancillary services such as FCR-N, mFRR and aFRR have increasingly been more profitable than FCR-D. The right-hand side shows the revenue from optimal planning where the most profitable ancillary service has been selected for each hour. In reality, it is impossible to create perfect forecasts. Therefore, the outcome should be seen as an indication of the potential for remuneration when combining the delivery of different support services.
Electricity system services
Local flexibility for grid owners
About 10% of CheckWatt's customers currently live in an area where the local grid owner buys flexibility during the coldest days of the year. These are few hours, but they are often well paid. Early indications from the flexibility market in Gothenburg and Mölndal, where CheckWatt participates with around 500 battery systems, suggest that the revenue for delivery during 50-100 hours can be around SEK 150-200 per kilowatt (or SEK 150,000-200,000 per megawatt) per year, in addition to revenue from, for example, ancillary services.
Within a few years — driven by EU legislation and accelerating electrification — we believe that all grid owners in Sweden will need to buy local flexibility to avoid unnecessarily expensive grid expansion.
Local flex
1000 - 2000 SEK
Revenue for a 10 kW / 10 kWh battery participating in Effekthandel Väst in winter 2024, corresponding to SEK 100-200/kW/season, in addition to revenue from other markets.
Charge cheap + Electricity system services
Charge the battery when the price of electricity is low and use it at a later point in time, combined with revenue from services electricity system services
Store solar + Electricity system services
Charge the battery with solar electricity and use it at a later date, combined with revenue from electricity system services.
Services within the property
Finally, there are several ways for batteries to benefit locally in the building, for example by storing self-produced solar electricity, peak shaving and – given an hourly price contract – charging at low electricity prices and discharging at high ones.
For a 10 kW and 10 kWh battery used solely to store solar electricity between November 2023 and October 2024, the savings were around SEK 500. For an equivalent battery used during the same period to charge at low electricity prices and discharge at high prices, the savings were in the order of SEK 1,000 in bidding zone 3 and SEK 2,000 in bidding zone 4.
Although the savings for these are usually lower than for providing ancillary services today, they have an important role in ensuring stability of revenue and savings on electricity costs compared to other services that are likely to be more volatile.
How has the revenue been for systems connected to Currently?
Below you can see examples of revenue after fees in previous periods for battery systems connected to CheckWatt. In previous years, revenues have mainly come from the delivery of FCR-D, which has been the most profitable ancillary services. In the future, they will come to a greater extent from several different ancillary services, local flexibility, arbitrage in electricity trading and services locally in the property.
Revenue after fees and bidding safety margin
Time period
Average revenue for -
Excluding VAT
Residential
10 kW / 10 kWh
kr
per month
Industry
250 kW / 250 kWh
kr
per month
Utility
1 MW / 1 MWh
kr
per month
To date, CheckWatt's battery management revenues have come primarily from the provision of ancillary services. Here we use historical prices for the ancillary service FCR-D, which has dominated revenues for batteries historically. The remuneration is calculated after safety margins in bidding and after fees to CheckWatt, installation partners and Balance Responsible Party. In practice, these fees may vary from customer to customer. Prices for ancillary services are reported on Svenska kraftnät's website Mimer. These deductions are assumed in the calculation:
- 25% for fees
- 15% safety margin
- 60kr/month in fixed fee
- Possible reduction in bidsize due to technical regulations of the service
Developments ahead
Ancillary services
Since the summer of 2024, ancillary services such as FCR-N, mFRR and aFRR have periodically been more well-paid than FCR-D, which in previous years has dominated the revenue for a battery system. Especially mFRR is extra promising as the needs, according to Svenska kraftnät, are expected to quadruple between 2023 and 2026. CheckWatt is continuously working to pre-qualify and make battery systems available for various ancillary services so that you as a battery owner can maximize your revenue. Below is a forecast of the need for ancillary services in the coming years.
Svenska kraftnät expects mFRR needs to quadruple between 2023 and 2026
Preliminary future volume requirements for balancing, broken down by type of service. Adapted figure from Svenska kraftnät.
Want to know more about the future of battery management?
Read moreDay-ahead and intraday electricity trading markets
In a similar way to when a homeowner with an hourly price contract can charge a battery when electricity is cheap and use or sell when electricity is expensive, CheckWatt can, via a Balance Responsible Party, place buy and sell bids directly on the various electricity markets. In addition to the day-ahead market (or “spot market”) where electricity prices are set for the coming day, there is an intraday market where Balance Responsible Party have the opportunity to place new purchase and sales bids the more accurate the forecasts of production and consumption become as the operating hour approaches. By placing bids on both the day-ahead and intraday markets via a Balance Responsible Party, battery owners without hourly price contracts can also make money from variations in the electricity market.
CheckWatt AI
CheckWatt uses AI to increase the value of services within the property. The AI models analyze how energy is used and produced in the property. Based on that, the battery is then controlled to take advantage of electricity price variations, power tariffs and solar storage - while delivering ancillary services. CheckWatt has launched these features as part of a pilot project with the ambition to roll this out to everyone with a connected battery soon.
Questions?
Contact us on info@checkwatt.se