Battery energy trading is a way for your business to earn additional income by changing the times you charge and discharge the battery on your site. You need to work with a specialist trading provider to access the market.
Below, find out how battery energy trading works in Great Britain, what affects the returns, and what you need to check before deciding whether it is right for your site.
What is battery energy trading?
Battery energy trading is when you work with a specialist trading provider to charge or discharge your battery in response to electricity prices or when the grid needs help to keep electricity supply and demand in balance. Your business gets paid for taking part.
How does your battery earn trading income?
The two ways your battery can earn trading income are:
1. Export trading: selling stored electricity to the grid
Your trading provider charges the battery when grid electricity is cheaper or stores spare electricity from your solar panels.
Later, when export prices are higher, it tells the battery to discharge. Your site uses what it needs first, and any electricity left over is sent to the grid, as long as your export limit allows it.
2. Flexibility trading: getting paid to change how you use electricity
With flexibility trading, your trading provider estimates how much electricity your site is likely to take from the grid during a half-hour period. This is called your “baseline”.
It earns income for your business by changing how much electricity your site takes from the grid compared with that baseline. This happens when the grid needs businesses to use more or less electricity to help keep supply and demand in balance.
So, if the grid has too much electricity, your provider may charge your battery so your site uses more. If the grid has too little, it may stop charging the battery or use it to power your site so you use less. Your business gets paid for making that change.
How much does battery energy trading pay?
The amount you’re paid for battery energy trading varies according to the type of payment.
1. How much export trading pays
Your trading provider multiplies the amount exported by the price it secured. It then deducts any agreed fees or share of the income.
Example: If your battery exports 100 kWh at 20p per kWh, you earn £20 before fees.
2. How much flexibility trading pays
Your provider works out how much your site changed its electricity use compared with the expected amount. It then uses the agreed payment rate to work out what you earned, before taking off any fees or its share of the income.
Example: If your site uses 40 kWh less than its baseline and the agreed price is 30p per kWh, you earn £12 before fees.
What could that mean over a year?
There is no set amount a commercial battery will earn from trading. It depends on your battery, your site, electricity prices, and how often good trading opportunities come up.
In one worked example used in a GridVolt installer presentation, a single night and morning trading period was modelled. If similar opportunities were available for around half the year, the example worked out at about £5,710 a year in trading revenue.
This is only an example, not a forecast of what your battery will earn. The best way to estimate your own earnings is to use real data from your site.
How does your provider decide when your battery should trade?
Your provider checks whether trading will make more money than using the battery in another way, like powering your building when electricity is expensive.
It will also leave alone any electricity you have asked it to keep for your building or as backup.
Example: Your battery might trade if export prices rise and your site does not need the stored electricity.
Example: Your battery might not trade if using the electricity to power your building would cut your bill by more.
When making that decision, it also considers:
| What it checks | Why it matters |
|---|---|
| How full the battery is | It needs electricity stored to discharge and empty space to charge |
| How much solar power you expect to generate | Your provider may leave room in the battery to store it |
| How much electricity your site can import or export | Your grid connection may limit the size of a trade |
| The price available | A higher payment may make trading more worthwhile |
| The cost of charging the battery again | A trade needs to earn enough to cover the cost of replacing the electricity used |
Does a trading provider control my on-site battery?
Your trading provider needs to have control over your battery and inverter so it can act when a trading opportunity appears. It does this via an energy management system that connects to the equipment on your site.
Note: An inverter controls the flow of electricity between your battery, your building, and the grid.
To decide what the battery should do, the energy management system first needs to know what is happening on your site. It tracks information like:
- How full the battery is
- How much electricity your site is using
- How much solar power your panels are generating
- How much electricity your site can import or export
It uses this information to decide whether the battery should charge, power your site, export electricity, or wait.
But you agree the limits the trading provider must work within before it starts. You say how much power the battery must keep in reserve, how full or empty it can become, and how much electricity it can import or export.
In other words, once the needs of your site are taken care of, your provider can use the battery to trade on your behalf.
What affects how much battery income I can earn?
The amount your battery can earn depends on your equipment, your site, market conditions, and the cost of each trade. Here’s how:
| What affects earnings? | What it means | How it affects what you can earn |
|---|---|---|
| Battery power and capacity | The battery’s power rating, measured in kilowatts (kW), shows how quickly it can charge or discharge. Its capacity, measured in kilowatt-hours (kWh), shows how much electricity it can store. | A battery may store a lot of energy but still release it quite slowly. That might be a problem if the grid needs a lot of power in a short time. |
| How much electricity your site uses | Before exporting stored electricity to the grid, most energy management systems will use it to power your building and cut how much electricity you buy. | The more power your building uses, the less may remain available to sell to the grid. |
| How full the battery is | The battery needs electricity stored in it before it can send power to your site or the grid. It also needs empty space before it can take in more electricity. | If it is nearly empty, there is not much electricity left to send out. If it is nearly full, there is not much room to store more. |
| Import and export limits | Your grid connection is the link between your site and the wider electricity grid. The Distribution Network Operator sets how much electricity your site can take from or send to the grid at one time. | A large battery does not always mean you can carry out a large trade because the DNO may set a lower limit. |
| Market conditions | Electricity prices change throughout the day and the grid sometimes needs businesses to use more or less power. | Your battery has more chances to earn money when electricity prices change a lot or the grid needs help. If prices stay steady and the grid is balanced, there may be fewer chances to trade. |
| Solar generation | Solar panels can charge your battery with electricity you generate on site, so you do not have to buy it from the grid. | You do not need solar to trade because the battery can also charge from the grid. |
| Energy losses | Batteries lose some of the energy they store every time they charge and discharge, usually as heat. | Any trade must cover both the cost of charging the battery and the likely amount of energy lost before the battery sends the electricity back out. |
| Provider charges | Your provider may charge a set fee, keep a percentage of the trading income, or do both. | Any forecast should show how much the trade earns before charges and how much your business keeps. |
| Software and forecasts | The software looks ahead at how much electricity your site may use, how much solar power you may generate, how full the battery is, and what prices may do. | It uses this information to decide whether your battery should trade, power your site, charge, or wait. |
Is your commercial site suitable for battery trading?
Battery trading can work well for factories, warehouses, hotels, care homes, offices, shops, EV charging sites, and many other businesses. If you already have a battery, it is worth checking whether trading could earn extra money for your business.
The type of business you run matters less than how you use your battery. If your battery sometimes has stored electricity you do not need, or empty space available to charge, there may be spare capacity your provider can use to earn money.
Ask a trading provider, installer, or EPC to estimate what your battery could earn. This is what they’ll want to check:
- The battery and inverter: The provider needs to check that its control system works with the exact battery and inverter you have on site.
- The battery’s power and usable capacity: The battery’s kW rating shows how quickly it can charge or send electricity out. Its usable kWh capacity shows how much electricity is actually available to use or trade.
- The site’s electricity data: Around 12 months of half-hourly data shows how much electricity your site uses at different times of day and year. This helps the provider work out when your battery may be free to trade.
- How you already use your battery: Your battery may already store solar electricity, power your building, or keep electricity in reserve for backup. The provider needs to know this before deciding how much of the battery is available for trading.
- The site’s import and export limits: Your local Distribution Network Operator, or DNO, sets how much power your site can take from or send to the grid at one time. These limits can restrict how large a trade can be.
- The electricity tariff and export payment: The provider compares how much you pay for electricity with how much you could earn by exporting it. This helps it decide whether trading or using the battery on site could make you more money.
- Solar generation: The provider needs to know when your solar panels make electricity and how much you use, store, or send to the grid. This affects how much room or stored electricity may be available for trading.
- Planned changes: New EV chargers, machinery, heat pumps, or different opening hours can change how much electricity your site uses. Your provider will try to work out how much electricity you will need after those changes and how much battery capacity will still be available for trading.
- Battery reserves and warranty limits: You may want the battery to keep some electricity for your site or as backup. The provider must also keep charging and discharging within the limits set by the battery warranty.
High electricity use does not automatically make a site unsuitable for trading. It might simply mean the battery sometimes saves more money by powering the building than it would earn from trading.
The installer or EPC does not need to work this out alone. It should collect accurate information about the site and ask the trading provider for an earnings forecast based on that specific site.
GridVolt: choose a battery energy trading provider with software that adapts
Some energy management systems tell batteries to charge and discharge at the same time every day. This can save money, but the problem is that they assume your electricity use, solar generation, and energy prices will always follow the same pattern.
Ask a potential supplier about the software it will use to control your battery. More advanced systems use live data to decide, within the limits you set, whether your battery should:
- Power the building
- Store solar electricity
- Charge from the grid
- Keep electricity in reserve
- Take part in a trading opportunity
This is what GridVolt’s Energy Manager does. It controls and optimises your battery and other energy equipment on site and works with many solar PV systems, EV chargers, heat pumps, building management systems, and other equipment. It updates its plan 96 times a day as your electricity use, solar generation, and energy prices change.
Pair Energy Manager with GridTrade to access Great Britain’s energy markets, where your battery can earn trading income.
Fill in the form on the right to find out more or get in touch via our contact page.
Frequently asked questions on battery energy trading
What did P415 change about battery energy trading?
Before P415, you normally had to use your electricity supplier to trade through the GB wholesale electricity market. The problem was that few suppliers supported it.
P415 created a new role called a Virtual Trading Party. This means a separate trading provider can now trade using your battery without having to be your electricity supplier. In fact, they work alongside each other.
Which electricity markets can batteries trade in?
A trading provider may look for opportunities across several markets.
Day-ahead wholesale market
Businesses buy and sell electricity for delivery the following day. Providers use demand, weather, renewable generation, and market price forecasting to decide whether to arrange a trade in advance.
Intraday wholesale market
Prices can change after the day-ahead market closes because the weather forecast changes, a power station develops a fault, demand differs from expectations, or renewable generation rises or falls. In these cases, the opportunity comes from buying or selling electricity at the new price closer to the time it will be used.
Balancing Mechanism
The National Energy System Operator uses the Balancing Mechanism to iron out imbalances in electricity supply and demand close to real time. Your provider may offer to charge or discharge your battery to help it, and if NESO accepts the offer, your business earns money when the battery carries out the instruction.
Local flexibility and constraint markets
Some opportunities depend on the location of your site. For example, batteries in parts of Scotland may be paid to take on surplus renewable electricity when the network cannot shift it to areas where demand is higher.
Is battery trading the same as energy arbitrage?
Energy arbitrage means charging a battery when electricity is cheap, then using or selling that electricity when prices rise.
It is one way a battery can create value, but it is not the only one. A battery may also:
- Power the building when electricity is expensive
- Export electricity to the grid
- Stop charging when the grid needs businesses to use less power
- Keep some capacity ready in case the grid needs help
Your battery cannot use the same stored electricity for two jobs at once. It’s the trading provider’s software that works out which option is likely to earn or save the most money.
Why are export trading and reduced-import trading different?
A battery can earn money by sending electricity to the grid or by changing how much electricity your site takes from it.
Exporting electricity
A behind-the-meter battery normally powers your building first.
For example:
- The battery discharges at 200 kW
- The building is using 120 kW
- The battery keeps discharging for 30 minutes
The first 120 kW powers the building. Only the remaining 80 kW passes through the meter and into the grid.
Over 30 minutes, that means the site exports 40 kWh. So even though the battery discharges at 200 kW, the site does not export the full amount.
Reducing electricity imports
A battery can also earn money without exporting anything.
For example, the battery may have been due to charge at 100 kW. Your provider may stop that charge when the grid needs businesses to use less electricity.
The site then takes 100 kW less from the grid than expected. That change may earn money even though no extra electricity leaves the site.
This is why a provider needs to understand how your site normally uses electricity. The battery’s size alone does not show how much trading income it can earn.
What can a commercial battery earn from trading?
There is no set amount that every commercial battery will earn from trading. Two same-sized batteries can earn very different amounts because of the way each site uses electricity, the prices they pay, their grid limits, and more.
The only useful estimate is one based on the site’s real electricity use, tariff, battery size, and connection limits.
A proposal should also separate:
- Bill savings: Money saved by using the battery to avoid buying expensive electricity
- Trading income: Money earned by changing when the battery charges or by exporting electricity
For example, if a battery saves £12,000 on electricity bills and earns £5,000 from trading, its total value is £17,000. However, only £5,000 came from trading.
Showing the two figures separately makes it clear how much money came from lower bills and how much came from trading.
Can an existing commercial battery take part in trading?
In many cases, yes. You may not need to replace your battery or buy a new one from the trading provider. The provider will first check whether your battery and inverter work with its system.
Some sites may need changes to their settings or extra equipment so the provider can communicate with and control the battery. GridTrade uses a small on-site device called an Energy Gateway for this.
Do you need solar panels for battery trading?
No. A commercial battery can charge using electricity from the grid, so it can trade without solar panels.
Solar panels can provide electricity made on site, which means you do not have to buy all the energy used to charge the battery. However, think of solar as helpful rather than essential.
Do you need to change your electricity supplier to start battery trading?
Not always. Some trading providers can work alongside your current electricity supplier. You keep buying electricity in the same way while the trading provider manages the battery. Other services may work differently, so check before signing a contract.