Q0015
BESS can create value by reducing demand charges, shifting grid purchases, providing resilience, supporting power quality, avoiding infrastructure upgrades and supplying grid services. The main Malaysian limitation is not technical capability but whether tariffs, contracts and market rules allow the owner to receive payment for those services.
Solar shifting alone may not produce enough value to finance a battery. Projects become more attractive when a battery performs several compatible services, but projected revenue must reflect services that are actually available and contractible—not hypothetical future markets.
#### 1. Maximum-demand reduction
A battery can lower a commercial or industrial customer’s monthly peak. The value depends on the applicable tariff, the magnitude and duration of the peak and how reliably the control system predicts it.
#### 2. Time-of-use cost reduction
Charging off-peak and discharging during peak periods can reduce energy costs where the tariff difference exceeds losses and degradation.
#### 3. Demand response
A battery can rapidly reduce a customer’s net grid demand when requested. TNB’s demand-response work includes BESS as a prospective controllable resource, alongside industrial loads, district cooling and EV charging.
Potential value could arise through:
The actual commercial framework must be confirmed before including revenue.
#### 4. Frequency and reserve services
BESS can respond more quickly than many conventional generators. Potential services include:
These capabilities create system value, but Malaysia requires defined procurement, qualification and settlement arrangements before independent owners can reliably monetise them.
#### 5. Deferred electrical infrastructure
A battery may reduce short-duration peaks on:
If the underlying constraint occurs only for limited hours, storage may cost less than immediately expanding conventional infrastructure.
#### 6. Reliability and avoided losses
Economic value may come from avoiding:
This is an avoided-cost value rather than market revenue. It should be based on the facility’s actual interruption history and consequence analysis.
#### 7. Power-quality value
A suitably designed system may mitigate voltage disturbances and provide rapid power support. The value is greatest where poor power quality causes measurable production or equipment losses.
#### 8. Connection-capacity optimisation
A hybrid renewable project can use BESS to increase utilisation of a fixed connection. A customer may use storage to remain within an agreed import limit or avoid a larger connection request.
#### 9. Renewable firming
Under CRESS, storage can help convert intermittent solar into a firm product and may affect the applicable system-access charge. This is an example of storage changing the commercial classification of renewable supply rather than merely moving energy.
#### 10. Capacity or availability
A battery can provide dependable power during defined periods if sufficient state of charge is reserved. Capacity value is distinct from energy-arbitrage value. Malaysia’s earlier CRESS clarification stated that no separate battery capacity payment was then available, illustrating the need to verify which revenues exist rather than assuming them. Energy Commission CRESS FAQ
#### 11. Environmental and contractual value
Storage may help a customer increase consumption of contracted renewable energy or meet hourly clean-energy goals. Environmental attributes must be checked carefully so the same renewable benefit is not claimed twice.
A credible financial model should:
1. Confirm that each revenue stream exists. 2. Identify the contract or tariff that pays it. 3. Check whether the services can operate simultaneously. 4. Reserve sufficient energy and power for committed obligations. 5. Include degradation caused by additional cycling. 6. Avoid counting the same avoided cost twice. 7. Apply realistic availability and performance assumptions. 8. Test the loss of each major value stream.
For example, a battery reserved at high state of charge for backup cannot use all its capacity for daily arbitrage. Similarly, a battery discharging for demand reduction may not be available for a concurrent grid event.
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