How to Avoid Losing Time and Money on a BESS Project
4 Common Investor Mistakes and Practical Lessons from VOLTAGE Group
Define the Business Model Before Selecting Equipment
Before choosing power capacity, energy capacity, and a supplier, the most important question must be answered: what exactly should the system do?
A BESS can:
generate revenue from price differences in the day-ahead market;
operate in the balancing market;
provide ancillary services;
work alongside a solar power plant;
reduce peak electricity demand for industrial facilities;
provide backup power;
combine several operating scenarios simultaneously.
The same power rating does not mean the same system. For example, a 10 MW / 10 MWh BESS and a 10 MW / 40 MWh BESS have different operating profiles, cycle requirements, degradation rates, capital costs, and revenue potential.
Determining storage capacity based on the principle of “our neighbor installed a two-hour battery, so let’s do the same” is risky. It is similar to buying a truck before deciding what cargo it will carry.
The correct sequence is different: business model, operating scenarios, technical and financial modeling, and only then MW, MWh, PCS, the number of containers, and a specific manufacturer.
Mistake #1: Purchasing Equipment Before Defining the Operating Model
One of the most common mistakes is looking for the cheapest equipment first and only then trying to determine how it will be integrated and how it will generate income.
The logic often sounds simple: buy the battery, connect it, and figure out the rest before commissioning. In practice, this approach does not work with BESS.
The system may not be suitable for the intended market application. It may have limitations related to cycle life, power output, or response speed. As a result, the equipment remains underutilized or fails to perform at its full potential.
The most expensive equipment is not necessarily the equipment with the highest price tag. The most expensive equipment is the equipment that does not operate properly or fails to generate the expected return.
Mistake #2: Underestimating Grid Connection Requirements
Having approved connection capacity does not automatically mean that a BESS of the same size can be connected without additional requirements.
The following aspects must be assessed:
- grid connection scheme;
- power flow directions;
- transformer and cable capacity;
- protection and control systems;
- revenue-grade metering;
- telecontrol and communication systems;
- requirements of the Distribution System Operator (DSO) or Transmission System Operator (TSO).
For large-scale systems rated at 10, 20, or 40 MW and connected to 35-110 kV networks, these issues become critical. The engineering complexity increases significantly, and the cost of mistakes is measured not only in additional expenses but also in months of lost operation.
A facility may be physically completed, but if the grid infrastructure is delayed by six months, the investor loses six months of potential revenue. The capital has already been invested, while the system remains unable to earn income.
That is why grid connection planning must begin at the earliest stages of the project, not after battery procurement. Licensing, commercial metering, contractual arrangements, and market access strategies should also be part of the project plan from day one.
Mistake #3: Looking Only at CAPEX
The lowest cost per kilowatt-hour does not guarantee the best project economics.
When selecting equipment, investors should evaluate more than just the initial investment cost, including:
- guaranteed remaining capacity;
- allowable number of cycles and depth of discharge;
- degradation throughout the lifetime of the system;
- losses and actual round-trip efficiency;
- operating temperature conditions;
- equipment availability;
- service cost and response time;
- availability of spare parts in Ukraine;
- warranty conditions and coverage.
A system with lower CAPEX may become more expensive over its lifecycle due to faster degradation, downtime, losses, or limited cycle capability. Therefore, investors should evaluate the total cost of ownership and the full economics of BESS operation rather than focusing solely on procurement cost.
Mistake #4: Splitting Responsibility Among Multiple Contractors
A BESS Is Not Just a Large Power Bank
A Battery Energy Storage System is a fully-fledged energy asset that operates bi-directionally. It concentrates a significant amount of energy within a relatively small footprint and therefore requires the same professional approach as a power plant.
The project scope should include electrical studies, protection systems, automation, cybersecurity, fire safety, factory and site acceptance testing, as well as full commissioning.
A BESS does not become operational when the container is installed on a foundation, nor when it is first energized. The system is truly ready only after it has successfully completed real operating scenarios and demonstrated that it can fulfill the objectives for which it was built.
