How to Get a $1 Million ROI with Battery Storage

Build a scalable Battery Energy Storage System (BESS) and achieve high ROI

This post focuses on the crucial role of energy storage in promoting corporate sustainability and profitability. By integrating BESS with renewable energy sources, companies can achieve significant cost savings, reduce their carbon footprint, and boost long-term profitability.

We will explore how BESS industry leaders are creating digital plants, increasing flexibility, and building a competitive advantage in a rapidly changing market. If your company is ready to lead the transition to BESS, this is your roadmap.

System Simulation Plays a Crucial Role

System simulation plays a crucial role in the techno-economic evaluation of battery energy storage systems (BESS) in the energy sector, especially when integrated with renewable energy sources such as wind turbines and solar photovoltaic (PV) systems.

Various use cases covered by BESS

Here are some key aspects:

1. Balancing Power Generation and Consumption:

   • Peak Shaving and Load Shifting: By simulating different load profiles, BESS can be optimized for peak shaving (reducing peak demand) and load shifting (moving energy consumption to off-peak times), which can reduce energy costs and improve grid efficiency

   • Grid Stability: Simulations can assess how BESS can be used to balance intermittent renewable energy generation with grid demand, enhancing grid stability and reliability

2. Integration with Renewables:

   • Energy Management: Advanced energy management strategies can be simulated to coordinate the operation of BESS with renewable generation, ensuring that energy is stored and dispatched in the most efficient way. Including the weather conditions.

3. Energy Price Evolution:

   • Forecasting and Optimization: System simulations can model future energy price scenarios, helping to optimize the operation of BESS for energy arbitrage (buying low, selling high). This ensures that the BESS is used in the most cost-effective manner

4. OPEX/CAPEX:

   • Cost Analysis: Simulations can provide detailed cost-benefit analyses, including capital expenditures (CAPEX) and operational expenditures (OPEX). This helps in understanding the financial viability and payback period of BESS projects

   • Degradation Modeling: By simulating the degradation of battery cells over time, it is possible to estimate maintenance costs and replacement schedules, which are critical for long-term financial planning

Overall, system simulation provides a comprehensive framework for assessing the technical and economic feasibility of BESS projects, helping stakeholders make informed investment and operational decisions.

We will explore the initial phases of a Battery Energy Storage System (BESS) project together, focusing on some technical and economic assessments for success (OPEX/CAPEX, energy price trends, load balancing, return on investment), and moving through the different stages with Simcenter System Simulation:

• To calculate your customer's electricity bill

• Considering some weather forecasts

• From renewable energy (solar PV)

• Battery Electric Storage System (BESS) optimization and control strategy

• To typical results in operations based on realistic scenarios

The use case here is a food processing plant near Lyon, France. Some effort was devoted to modeling the solar photovoltaic (PV) system integrated with the BESS and surrounding consumers. With its load and heating system represented over a one-year period (January to December), the digital twin considers solar PV BESS operations with different electricity tariff structures and PV or BESS unit costs. Therefore, it addresses the technical and economic value of adopting BESS in dynamic tariff structures.

Although the case study was conducted in France, it is important to highlight that even more impressive results could be obtained in countries with higher solar incidence, such as Brazil. High irradiance throughout the year significantly increases the potential for photovoltaic generation, increasing BESS efficiency and reducing the payback period. Thus, the combination of high solar resources and the application of advanced simulation strategies makes the Brazilian scenario especially promising for energy storage and renewable energy integration projects.

Better Design for Operational Excellence

As the BESS economy gains unprecedented momentum, companies are racing to meet the growing demand for clean energy. However, scaling production while remaining profitable, sustainable, and resilient poses a formidable challenge.

BESS producers and equipment manufacturers must overcome fragmented data systems, high energy costs, and supply chain complexities to stay ahead. Companies striving for operational excellence are already turning these challenges into opportunities. By leveraging digital twins and advanced simulations, they are optimizing processes, reducing costs, and improving scalability.

The energy industry needs BESS to save money and reduce carbon emissions.

Digital Twin for an Industrial Facility

This is a distributed BESS digital twin to predict and optimize system performance with multiphysics. It includes consumers (food processing facility: 20°C) with the heating system and customer load, grid connection, solar PV with solar panels, stationary batteries, as well as a smart controller based on weather conditions and energy price fluctuations.

BESS Digital Twin in Simcenter Amesim

In the image above, the Heating System, Consumer Load, and Grid Energy blocks were modeled in Simcenter Amesim based on tables containing actual operating data from the industrial facility and predefined formulas for calculating grid energy consumption and costs. These blocks represent the system's energy behavior under different load conditions, providing a reliable basis for analyzing the performance and operational costs of BESS systems.

The Solar Panel and Battery blocks use simplified physical models to represent the actual operation of these devices. Photovoltaic generation is simulated using historical solar irradiance and ambient temperature data, while the battery model was parameterized based on information from technical catalogs, allowing for the prediction of load states, efficiency, and available capacity. These models capture the system's energy dynamics.

Finally, the Intelligent Control block integrates all this information to enable real-time decision-making. Thus, the control optimizes the energy flow between generation, storage, and consumption, seeking to reduce costs and improve overall system performance.

By running the simulation, users can access all variables from the different subsystems. Thus, complete information is available, from consumer load [kW] to the electricity bill over time [€] (€1 to $1). The evolution of electricity prices throughout the year, with their daily fluctuations, was considered. Below, two price trends are shown on January 1 and July 19, to obtain information on minimum/maximum prices at different times of the year.

Typical results obtained with the BESS digital twin

The solar panel includes your GPS location, turbidity factor (the effect of particles, similar to smoke in the air), or cloud cover factor (for weather conditions).

Cloud cover factor changes depending on weather conditions

At the same time, the outside temperature changes are included from a known database, allowing users to assess its impact on the heating system, considering the factory indoor temperature setting.

Temperature Evolution (ceiling, outdoor, indoor) and Air Conditioning Power

This analysis allows you to calculate associated information, such as air conditioning power [W] or the energy consumption of all surrounding subsystems. This allows users to obtain a realistic power evolution to evaluate the balancing mechanism and optimal control strategies to implement in their BESS system.

BESS Macroanalysis with Realistic Scenarios

The industrial unit model allows for mass exploration. Analyses are completed in just a few minutes, opening the door to long and complex scenarios.

Energy generation and consumption [kW] for all subsystems (the battery is inactive here)

Users can practically evaluate the energy generation, storage, and consumption of all subsystems. Meanwhile, the intelligent control system manages the Energy Management System (EMS) to distribute the energy, store it in the BESS, or deliver it to the grid. Since all changes are intermittent or dynamic, a system simulation tool, such as Simcenter Amesim, is necessary to optimize sizing and control strategies.

Finally, the user can access variations in energy flows over time. For example, you can check the energy generated by solar panels or brought in by the grid, as well as the energy supplied by the battery. This corresponds to the energy needed by the load, while some small levels of energy are taken from the grid or returned to the battery during off-peak periods when demand is low.

Energy Flow Variations Over Time

This is a major achievement! We can already observe good results thanks to the digital twin with Simcenter System Simulation. But it's possible to go much further, more technically and economically. See how you can save US$1 million over 20 years while simultaneously reducing a huge amount of CO₂ emissions, down to -17 tons of CO₂ equivalent.

Save US$1 million and tons of CO₂ equivalent

We will now address the business and decarbonization aspects, with the goal of demonstrating how it is possible to create a scalable forecast for BESS systems, in order to measure and replicate significant successes. The digital twin of the food processing unit is equipped with metadata to produce the relevant economic KPIs (key performance indicators) to ensure its monetization, return on investment (ROI), or payback through CAPEX (capital expenditures) or OPEX (operating expenses).

Operating Costs [$k] during the Scenario

The reference is the electricity bill without solar panels or BESS. It amounts to US$103,000 paid over one year. By installing the solar panels and BESS, the new electricity bill, which is now US$33,000 after one year, can be captured, with an investment of US$625,000 for the photovoltaic system and US$77,000 for the BESS.

This corresponds to a savings of US$70,000 per year in OPEX, thanks to the installation. Discounting CAPEX costs, a benefit of US$698,000 is obtained after 20 years of operation. CAPEX costs are reimbursed after a 10-year payback period. Knowing that the value doubles every 15 years due to the interest rate, it can be assumed that the actual savings will reach US$1 million after 20 years.

Please note that this is a preliminary calculation that shows the potential, while things like inflation and maintenance costs are not covered, which is good for a first estimate.

Profitability [$k] including payback [year]

Now is the right time to optimize sizing and extract maximum value from the new installation. Discover the maximum benefits and best returns in just a few clicks. A batch study was configured to vary selected parameters, defined as the number of solar panels (366, 488, 610) and the number of battery racks (0, 100, 150). It was observed that the payback period can be reduced to approximately 9 years (-11%) in the most favorable configurations, while other options can extend it to up to 12 years (+20%).

Comparison of return on investment [year] depending on the number of solar panels and the number of racks

Finally, for the Earth's good health in relation to climate change, it is also essential to consider the reduction of carbon emissions thanks to renewable sources, the BESS system, and smart control strategies.

CO₂ emissions from the grid, load, and heating, as well as the total CO₂ reduction per year

A significant reduction of 17 tons of CO₂ equivalent per year was achieved. This result represents a significant contribution to the sustainability process through decarbonization. All these achievements were achieved using the digital twin through Simcenter System Simulation.

Going Further

You can even go a step further, introducing a new paradigm with grid supervisory control. The latest and most innovative technologies allow the combination of artificial intelligence (AI), weather forecasting, and streamed data. This offline digital twin is converted into an executable digital twin that connects real-time performance data with accurate and well-orchestrated plant information and simulation tools, allowing you to troubleshoot critical system situations (surges during switching, etc.) or benefit even more from price and CO₂ reductions. What a great prospect!

Grid Supervisory Control, Combining AI, Weather Forecasting, and Streaming Data

In short, owner-operators in the global BESS business have a historic opportunity to expand their business and market share in the coming decades. The companies that will emerge as leaders in the delivery sector will be those that can overcome the complexity of BESS and turn it into a competitive advantage.

System simulation definitely helps you succeed in your BESS journey thanks to digitalization, system integration, and intelligent controls.

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Schedule a meeting with CAEXPERTS and discover how to transform the potential of your BESS project into real results. Our experts will show you how the use of digital twins and system simulation can optimize sizing, reduce OPEX, and accelerate return on investment (ROI)—all while your company advances in the energy transition and decarbonization. Take the next step toward efficiency and sustainability: contact us today.

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