  Given the declining cost of battery technology in the last decade, nowadays
BESS becomes a more attractive solution in electrical power systems. The
objective of this work is to analyze the potential utilization of BESS in the
major European electricity markets. A general payoff model for BESS operation
is proposed to correctly address the operational flexibility of battery
systems. Utilization factors such as potentially profitable utilization time
and rate are calculated for common applications including energy arbitrage and
frequency support services using real market information. The result shows that
under the current empirical estimation of the battery cost and lifetime, BESS
is not feasible for energy arbitrage in most of the European electricity
markets. However, BESS shows clearly and significantly higher potential in
providing frequency support services. The result suggests that, when the
frequency containment reserve is remunerable, the potentially profitable
utilization of BESS has become already accretive in most of the European
countries. For example from January to September 2021, the potentially
profitable utilization rate has reached almost 100% for the FCR-N service in
the Danish market. Comparing the regional electricity markets in Europe, BESS
has shown significant potential in becoming a feasible solution in Central
Western Europe and parts of Northern Europe by providing frequency regulation
services. Meanwhile, in the British Isles and some other islanded local
markets, a remarkable level of scarcity of flexibility has been revealed by the
investigation, and the potential of BESS would also be considerably
encouraging.
