**7.3 Financial benefits of energy storage**

Energy management is a critical issue for businesses seeking to maintain and reduce operational costs. Energy storage systems give businesses the control over distributed energy resources, allowing them to save money on demand charges, provide critical continuous power to protect against grid variability, and better integrate renewable energy sources to foster more sustainable and financially sound business practices. Every planning and execution approach should be connected to the real-time control and organizational functionality of the ESS in conjunction with Distributed Energy Resources (DER) in order to achieve a rapid integration process [62].

The bulk of C&I-scale(commercial and industrial) facilities must pay demand charges based on peak power use. This expense often accounts for 30–70% of the total energy expenditures on a commercial electric bill. Energy arbitrage can result in significant cost savings by discharging energy during peak usage and cost periods, reducing load during those peak periods, and resulting in lower demand charges.

Load shifting is a critical component of this method for lowering energy expenses. BESS (described in Chapter 5 (5.1)) and related software assess consumption patterns and storage to efficiently identify the ideal time to charge and discharge stored energy, moving peak loads to off-peak hours.

Finally, BESS may be utilized to "smooth out" grid fluctuations, effectively becoming the major source of site power and relegating the grid to a secondary energy source. This allows the site to not only disregard grid power outages (and the possible expenses associated with them), which are limited only by the site's storage capacity, but also maintain a constant power factor and eliminate any grid oscillations that may compromise sensitive equipment.

Moreover, the energy storage could be used to adjust the amount of electricity produced from renewable energy sources. Energy is retained when demand and energy prices are low so that it can be used when.

a.demand and energy prices are high and

b.output from intermittent renewable energy production is low [62].


At present, in many parts of Europe, energy storage projects have to pay for both extracting electricity from the grid and pumping power into it, and this legacy policy has long been seen as both a major obstacle to making an economic argument for energy storage and one that could be overcome reasonably quickly. The Committee of Members of the European Parliament (MEPs) has recently pointed out that this is one of a number of 'shortcomings' in network codes across Europe. Further changes will be made to the European Energy Taxation Directive in 2023 to 'ensure a harmonized taxation on all storage and hydrogen production.' In the meantime, the EU also responded to the fact that the share of energy costs charged as tax is much higher than energy consumption itself [64], i.e. one of the appropriate and important steps and solutions should be to tax reduction.
