Africa Battery Energy Storage Systems (BESS) Capacity Building Utility-Scale Storage: BESS Valuation, Tariffs, and Remuneration [Slides]
Utility-scale Battery Energy Storage Systems (BESS) are key to enhancing grid reliability, integrating renewable energy, and providing operational flexibility. Designing effective valuation, remuneration, and tariff frameworks is essential to ensure both system benefits and financial viability for developers. This presentation outlines a structured methodology for evaluating BESS projects, covering policy and legal considerations, cost and revenue analysis, benchmarking, financial sensitivity, and risk assessment, while ensuring alignment with public interest. It also explores valuation of multiple storage services - bulk energy, ancillary services, and infrastructure support - and monetization strategies through capacity payments, energy tariffs, tolling, arbitrage, and non-wires alternative payments. Technical factors, including round-trip efficiency, degradation, and storage duration, are integrated into financial and operational modeling to quantify both system-wide and project-level benefits. Through case studies and simulation-based approaches, this framework provides regulators, utilities, and developers with practical guidance for tariff design, payment structures, and investment decisions, maximizing the economic and societal value of BESS deployment.