Harnessing BESS’ Potential in the Nordics: Key Insights from our Webinar

The BESS race is on! BESS owners and developers are looking for the most profitable markets to secure long-term revenue and fast ROI. While a strong focus has been put on the United Kingdom and Germany, the Nordic countries represent a profitable opportunity for battery storage. 

In our webinar “Rise of Batteries, Unlocking the Long-Term Business Case for BESS”, our energy market experts took a deep dive into what it’ll take for battery professionals to secure long-term revenue. Here are their top insights:  

#1 Renewables and increased electricity demand will drive the need for BESS in the Nordics

Overall electricity consumption in the Nordics is expected to double by 2040, boosted by the growth of electricity-based industries and data centres. Just in Finland, nearly half the electricity production necessary to cover this exponential increase will be covered by wind energy. The combination of exponential electricity demand coupled with the variability of renewable energy generation will create volatility in the market and, therefore, create a strong need for large-scale storage to respond to variations in production and balance supply and demand efficiently. While collocated projects are still rare, they are expected to become the majority. 

Those BESS will focus on balancing the peaks and troughs caused by variable renewable energy and managing transmission constraints, rather than supporting short-term balancing requirements.

The Nordics' first wave of BESS development (2022–2024) was driven by the lucrative frequency containment reserve (FCR) markets. However, with initial high returns attracting large development pipelines and BESS volumes starting to equal the size of the short-term frequency markets, the FCR markets are heading towards saturation. At the same time, BESS CAPEX is coming down and has reduced by roughly 40% from 2019, reducing the income needed to achieve the same return. 

#2 Beyond the FCR boom - finding revenue in wholesale and mFRR markets

While frequency markets have been the primary revenue driver for BESS, the value stack is shifting toward wholesale markets, including day-ahead, intraday, and imbalance trading. The transition to 15-minute market intervals will create greater price variations and open new arbitrage opportunities for energy storage operators.

We also see strong revenue potential in the manual Frequency Restoration Reserve (mFRR) market. Many saw mFRR as an unideal market for BESS units because of its one-hour endurance requirement (length of possible activation). This requirement could limit availability hours and size of bids, especially for one-hour systems with low cycle rates. 

However, many factors make it a challenge worth solving for:

• The procurement of mFRR capacity is expected to grow significantly in both Finland and Sweden over the coming years;
• The mFRR energy market is moving to 15-minute activation windows, which will make it easier for BESS to participate;
• Activations have historically been rare and usually shallow, meaning not all bids are activated, which enables operators to manage their availability strategically.

Unlike conventional assets, BESS units can leverage their fast response times and state-of-charge management to capitalise on mFRR opportunities. 

The BESS revenue stack will continue to evolve. Project owners will need access to multi-market optimisation to circumvent saturation, which requires advanced optimisation capabilities. This makes it difficult for non-specialised optimisers to compete without expert trading strategies and asset management solutions.

#3 Successful BESS Projects Require a Holistic Strategy

A well-structured business case is critical for long-term success. While upfront costs are typically front of mind, ongoing costs such as warranty payments, battery health, or market positioning are as necessary to review regularly.  

Several strategic considerations are essential to navigate the complexities of the BESS market. Best practices include diversifying across multiple revenue streams and locations, ensuring strong project governance, and working with experienced partners to navigate complex trading and operational challenges.

The other side of the coin of a successful BESS project is risk mitigation. To do so, project owners must consider pre-qualification processes, continuous revenue optimisation and benchmarking against market performance, and setting up comprehensive monitoring and alert systems to maintain battery health and operational efficiency.

In other words...

The Nordic countries represent significant revenue opportunities for large-scale BESS projects, but success requires a deep understanding of market trends, technical requirements, and strategic planning. As the market evolves, staying ahead of shifts in value streams—such as the increasing importance of wholesale markets and mFRR—will be key to maximising returns.

Want to secure long-term revenue for your BESS project? Contact our team today to see how to maximise the value of your batteries.