Battery Energy Storage Systems: Energy Market Review, Challenges, and Opportunities in Frequency Control Ancillary Services

Gian Garttan, Sanath Alahakoon (), Kianoush Emami and Shantha Gamini Jayasinghe
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Gian Garttan: School of Engineering & Technology, Central Queensland University, Rockhampton 4701, Australia
Sanath Alahakoon: School of Engineering & Technology, Central Queensland University, Rockhampton 4701, Australia
Kianoush Emami: School of Engineering & Technology, Central Queensland University, Rockhampton 4701, Australia
Shantha Gamini Jayasinghe: Australian Maritime College, University of Tasmania, Launceston 7250, Australia

Energies, 2025, vol. 18, issue 15, 1-29

Abstract: Battery energy storage systems (BESS) are considered a good energy source to maintain supply and demand, mitigate intermittency, and ensure grid stability. The primary contribution of this paper is to provide a comprehensive overview of global energy markets and a critical analysis of BESS’ participation in frequency control ancillary service (FCAS) markets. This review synthesises the current state of knowledge on the evolution of the energy market and the role of battery energy storage systems in providing grid stability, particularly frequency control services, with a focus on their integration into evolving high-renewable-energy-source (RES) market structures. Specifically, solar PV and wind energy are emerging as the main drivers of RES expansion, accounting for approximately 61% of the global market share. A BESS offers greater flexibility in storage capacity, scalability and rapid response capabilities, making it an effective solution to address emerging security risks of the system. Moreover, a BESS is able to provide active power support through power smoothing when coupled with solar photovoltaic (PV) and wind generation. In this paper, we provide an overview of the current status of energy markets, the contribution of battery storage systems to grid stability and flexibility, as well as the challenges that BESS face in evolving electricity markets.

Keywords: BESS; frequency control ancillary services; primary frequency response; secondary frequency response; RES; battery degradation; cyclic degradation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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