Battery Duration Economics

The duration of a battery system—the ratio of its energy capacity (MWh) to its power capacity (MW)—dictates its operational strategy and financial returns. While 1-hour systems dominated early frequency regulation markets, the industry standard has rapidly shifted to 2-hour and 4-hour systems to capture deep wholesale energy arbitrage spreads. OPTIMUS runs granular cost-benefit analyses comparing the incremental CAPEX of adding battery blocks against the marginal revenue gained by extending the discharge window into the late evening peak. We also evaluate the emerging economics of Long-Duration Energy Storage (LDES) technologies (8-100 hours) for multi-day shifting.