BESS Optimisation: Why 2-Hour Systems Make a Difference

Battery energy storage systems (BESS) are playing a critical role in the energy transition, helping to stabilise the grid and integrate increasing levels of renewable energy. As the market evolves, so too does the conversation around BESS optimisation. One notable development is the growing shift in Northern Europe from one-hour to two-hour battery storage systems.

This move to longer-duration battery solutions isn’t just about extending capacity. It’s about maximising performance and unlocking new revenue streams. With higher cycling capabilities and smarter cost scaling, 2-hour systems can access a broader range of energy markets, from manual Frequency Restoration Reserve (mFRR) to intraday trading, while maintaining battery health over time. In regions with a large share of solar generation, such as Italy, Spain, California, and Australia, it has even become the norm to opt for 4-hour systems, which better align with solar generation patterns. 

For BESS owners and developers, these advances signal a crucial shift. Choosing system duration is no longer just a matter of technical performance — it’s a strategic decision that can define market competitiveness. With more revenue opportunities tied to optimised, longer-duration systems, making the right investment today is essential to staying ahead in a rapidly evolving energy landscape.

Technological Advances in BESS

As battery technology continues to evolve, the barriers to longer-duration battery storage are quickly coming down. What once seemed technically or economically unfeasible is now becoming the new standard, and that’s driving a fundamental shift from traditional 1-hour BESS configurations to more flexible, revenue-generating 2-hour systems.

One of the biggest related breakthroughs has been in battery cycling capabilities. Modern BESS can cycle more frequently with far less degradation than in previous generations. This means BESS assets can participate in energy-based markets, where charging and discharging may occur multiple times across the day, in addition to daily energy shifting, with less concern over lifespan limitations. By operating in these broader market segments, operators can extract more value over time.

But possibly the most crucial facilitator of this shift toward long-duration battery systems is the realisation that increasing system duration isn’t as cost-prohibitive as many once expected. While it’s easy to think that doubling the duration would double the cost, the reality is much more favourable. Due to factors like falling battery prices and more efficient integration and management technologies, scaling from a 1-hour to a 2-hour BESS typically results in only a ~39% cost increase. NREL’s 2025 Cost Projection for Utility-Scale Battery Storage shows that battery system CAPEX comprises energy and power components. Using NREL’s 2024 component values (energy $241/kWh; power $372/kW), moving from a 1-hour to a 2-hour BESS increases total CAPEX by ~39% (from $613/kW to $854/kW). 

In plain terms: you don’t need a bigger “engine” (power block); you’re mainly adding a bigger “tank” (cells), so costs rise sub-linearly. That improved cost-efficiency, combined with other advances in battery technology, has made it both technically feasible and financially strategic to shift towards 2-hour systems.

Why Energy Duration Matters

In today’s energy landscape, the value of a BESS asset isn’t just about how much power it can deliver: it’s about how flexibly and frequently it can operate. That’s where energy duration comes in. Moving from a 1-hour to a 2-hour system changes what a BESS can do in the market by expanding its operational range and enabling deeper multi-market optimisation. The advantages a 2-hour system offers compared to a 1-hour system are clear: 

Enabling market access

Energy duration determines which markets a BESS can enter. For example, a 30-minute system simply doesn’t meet the pre-qualification requirements for mFRR (manual Frequency Restoration Reserve), a key balancing market in many European countries. As mFRR requires at least one hour of availability, a 2-hour system qualifies easily. This opens the door to more stable revenue streams and participation in high-value ancillary services.

Maximising market participation

Longer-duration systems with higher cycling capabilities allow BESS operators to trade more frequently across intraday and balancing markets. Instead of cycling once per day, a 2-hour battery can respond to multiple price signals, capturing value during volatility and providing flexibility when it’s needed most. In short, more cycles mean more chances for operators to earn.

Enhancing multi-market optimisation

In complex and dynamic energy markets, such as those in the Nordics, system flexibility is crucial. These markets often require frequent and significant energy movement, which a 1-hour system with limited cycling simply can not handle efficiently. From a 2-hour BESS, developers gain the flexibility to operate across overlapping markets without running into performance or lifespan limitations.

Supporting renewable integration

As more wind and solar capacity comes online, the need for storage that can absorb excess generation and bridge periods of low output is becoming critical. Unlike short-duration assets designed primarily for frequency stabilisation, longer-duration systems can store surplus renewable energy during periods of oversupply and discharge it during evening peaks or lulls in production. This capability not only supports grid stability but also improves the utilisation of renewable assets, making 2-hour (or longer) systems a valuable enabler of the clean energy transition. 

Clearly, in today’s energy economy, duration is much more than just a technical spec. For asset owners and developers looking to maximise the return on their investments, that extra hour can make all the difference.

The Cost of Energy Duration 

And as we touched on earlier, that significant difference doesn’t tend to come at a significant cost. One of the most common misconceptions around battery energy storage is that doubling the duration means doubling the cost. But in reality, moving from a 1-hour to a 2-hour system doesn’t scale linearly in price. While CapEx certainly increases, it is not a 1:1 jump. So the extra investment unlocks significantly greater value over the asset’s lifetime.

So, why make the upgrade? It’s simple. A 2-hour BESS offers clear financial benefits compared to a 1-hour system:

• Higher revenue potential: With access to markets like mFRR and more room for cycling, 2-hour systems can generate significantly more income than their 1-hour counterparts.
• Increased trading opportunities: Longer duration means more flexibility to respond to price spikes and balance grid needs multiple times a day, granting asset owners more trading opportunities to increase their return on investment (ROI). 
• Stronger market positioning: As energy markets evolve toward greater flexibility and complexity, longer-duration storage is set to play a central role. Investing in 2-hour systems today positions BESS owners to lead, not follow, future energy market trends.

Looking Ahead: Why 2-hour Systems are The Smart Choice

Battery technology is rapidly advancing, and energy markets are shifting just as fast. In this landscape, 2-hour BESS systems are becoming the new benchmark by offering greater flexibility, higher cycling capabilities, access to more revenue-generating markets, and ultimately, a stronger ROI. For developers and asset owners, longer-duration storage is not just a smart upgrade; it’s a strategic move toward long-term success. 

Want to get maximum value from your BESS? Contact our team today to learn more about how energy duration can boost your performance — and how we can help you make the most of every market opportunity.