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Guide

The economics of industrial battery storage

A battery does not pay off through one application but through the right combination. This guide shows which levers decide the economics — and why capacity and power have to be sized as two separate questions.

kWh against kW — energy against power

Capacity (kWh) determines how long the battery delivers; power (kW) determines how hard it cuts a peak. Peak shaving is about kW, arbitrage about kWh. The wrong balance gives away return — EXAIOS optimises both together.

Multi-use instead of single purpose

A battery that only shaves peaks stands idle most of the time. Only stacking — peak shaving plus arbitrage plus balancing — raises utilisation and return. What matters is computing the physical conflicts between the services correctly, rather than flattering them additively.

Peak shaving vs. arbitrage vs. balancing

Peak shaving saves demand charge (predictable, site-specific). Arbitrage exploits price spreads (volatile). Balancing services (FCR/aFRR) pay for availability (market-dependent). The optimal mix depends on the load profile and the market — and it shifts over the lifetime.

Lifecycle, not purchase price

What decides is not CapEx but lifecycle economics including degradation, cycles, the replacement threshold (SOH) and operating cost. EXAIOS computes across the full lifetime, with a defensible SOH curve.

Example result — your case, computed live

EXAIOS returns the decisive figures for every site:

IRRNPVDSCRp10

We publish no invented numbers. Compute your real site in minutes — the first indication is free.

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Frequently asked questions

How large should an industrial battery be?

There is no blanket size — it follows from the load profile, the grid connection and the revenue mix. EXAIOS derives the kWh/kW sizing deterministically from your data.

Is peak shaving alone enough?

Rarely optimal. Multi-use raises utilisation considerably. EXAIOS tests which combination delivers the highest return at your site.

How is degradation accounted for?

Through an SOH curve with a replacement threshold — the lifecycle cost includes ageing and replacement, not just the purchase price.