What’s the market price for containerized battery energy storage? How much does a grid connection cost? And what are standard O&M rates for storage?
Finding these figures is challenging. Because of this, Modo Energy surveyed the battery community - to produce this battery cost benchmark.
If you finance, own, or develop battery energy storage systems, you can use this data to support procurement and sense-check financial models.
To produce this benchmark, Modo Energy surveyed various market participants in Great Britain. We received 30 responses, covering 2.8 GW of battery energy storage projects - with commissioning dates from 2024 to 2028.
Due to the anonymous nature of the survey, we have not mentioned the names of the specific projects included in this analysis. Instead, we have focused on general cost trends - so you will find data on the following:
- Total project costs.
- How containerised BESS costs change over time.
- Grid connection costs.
- Balance of Plant (BOP) costs.
- Operation and maintenance (O&M) costs.
- And the time taken for projects to progress from construction to commercial operations.
Other variables add costs to projects. For the sake of simplification, this survey covers capital expenditure (CAPEX) costs. For example, some costs that aren’t covered in this analysis include:
- Developer premiums and development expenses - depending on the project's attractiveness, these can range from £50k/MW to £100k/MW.
- Financing and transaction costs - at current interest rates, these can be around 20% of total project costs.
1) Total battery energy storage project costs average £580k/MW
68% of battery project costs range between £400k/MW and £700k/MW.
When exclusively considering two-hour sites the median of battery project costs are £650k/MW.
As projects get larger (in terms of rated power, MW), each additional megawatt becomes cheaper. As such, smaller sites are more expensive per megawatt - and some smaller projects cost over £1,000,000/MW.
2) Containerized BESS costs fall by 48% from 2024 to 2028
With cells becoming cheaper and performance improving, the overall cost of containerized BESS is declining. Here, containerized BESS is inclusive of the cells, racks, integrating electronics, and thermal management systems typically contained in a standard shipping container.
A system coming online in 2028 will likely pay 48% less in containerized BESS costs per MW than one coming online today.
In addition to the commissioning date, the scale of the project being considered is a key influence on costs. Projects smaller than 50 MW dominate the top end of the price range and tend to be deployed earlier.
Respondents pointed out that not all containerized BESS solutions are available to all developers, as they may fail stages in the procurement processes, which can drive up procurement costs.
3) Average connection costs for battery energy storage were £51k/MW
Notably, connection costs were listed as £0/MW for some existing sites or co-located projects.
Projects also differed depending on the type of connection. Distribution connection costs are paid for in full at the start of the project. In contrast, transmission connection costs can be spread over a longer period of the asset’s lifetime.
4) Average Balance of Plant (BOP) costs are £163k/MW
As with containerized BESS, respondents commented that Balance of Plant (BOP) choice was limited by the equipment providers that developers could work with.
Projects had varying cost allocations - as some connection costs could be picked up as wider BOP costs. Plus, projects commented that given market lead times, there was also a desire to hold critical spares (which varied the BOP costs).
5) Average O&M costs for battery energy storage systems are around £5k/MW/year
Variances arose from the inclusion/exclusion of different elements - e.g. business rates, insurance, or extended warranty.
6) On average, batteries take around 17 months from starting construction to becoming commercially operational
From starting construction works on site to commercial go-live, the average project took (or is projected to take) 17 months.
The time to build for delivered projects was 19.1 months, and the time estimated for future projects was 16.3 months.
This might be because project delivery is improving, or it could be that battery developers are optimistic. The data suggests a three-month buffer might be considered in project build timelines.
What questions did Modo Energy ask the BESS industry?
- What is the size of your battery energy storage system? (MW, AC)
- What is the duration of the battery energy storage system at rated power?
- What is the commissioning year?
- How long did the work take from starting on site to commercial operations?
- What is the expected total project cost for your battery energy storage system? (Including connection costs, contestable, non-contestable and private works. Excluding development premium and financing costs.)
- What is the expected cost of the containerized BESS for your battery energy storage system? (Excluding inverters and AC equipment.)
- What is the expected cost of the Balance of Plant contract for your battery energy storage system? (Including private works. Excluding transformer and connection costs.)
- What is the expected connection cost for your battery energy storage system? (Including contestable and non-contestable works.)
- What is your estimated O&M cost for your battery energy storage system? (Including OEM Warranty, BOP, and containerised BESS equipment.)
What next?
Please contact the Modo Energy team with your thoughts on the above data and any variations you’d like to see.
If you’d like to participate in a future survey, please also get in touch. We’d love to set up a recurring survey.