EU’s Shift to 15-Minute Power Pricing Boosts BESS Profits by Over 15%: Rystad

Several European countries that have begun offering Battery Energy Storage Systems (BESS) are expected to see more than a 15% rise in profits, according to a Rystad Energy analysis. This growth is mainly driven by the improving economics of BESS in Europe, which look much stronger following changes to the European Union’s (EU) power pricing structure in October.

The report explained that the new EU system sets power prices every 15 minutes, rather than every hour, giving BESS operators more opportunities to buy electricity when it is cheap and sell it when prices rise.

Arbitrage Potential Up 14% Across Europe

The report further found that since the new system was implemented, arbitrage potential has increased by 14% on average across European power markets. Some countries, such as Austria and Slovakia, saw increases of over 20%, while others, including Portugal, Norway, and Sweden, experienced only minor improvements. The analysis also noted that if a battery earns around 20% more each year due to these price swings, its total return on investment could increase by about 3% over 20 years.

Traditionally, EU electricity prices have been set every hour. However, when markets move from hourly to 15-minute trading intervals, known as 15-minute Market Time Units (MTUs), new opportunities emerge to generate income.

EU Shifts to 15-Minute Trading Intervals

In October, when Europe’s day-ahead electricity market shifted from hourly to 15-minute MTUs, it enabled quarter-hour energy trading, which proved far more profitable than trading across a full hour. For example, in Lithuania, shifting energy over 15 minutes earned about $263 per megawatt-hour (MWh), 14% more than hourly trading. In Germany, quarter-hour arbitrage was 16% more profitable than hourly arbitrage.

“In countries with less flexibility in power generation and consumption, a high share of intermittent renewables can cause large price swings. Rapid changes in wind or solar generation mean electricity prices can shift noticeably even within a single hour. Shorter 15-minute trading intervals capture these quick shifts, creating more opportunities for flexible assets. In contrast, in places with a flexible electricity supply, such as Norway with hydropower and Portugal with hydropower and gas, prices are more stable over an hour. As a result, the difference between profits from 15-minute and hourly trading is much smaller,” says Sepehr Soltani, Senior Analyst, Energy Storage at Rystad Energy.

Profits Shifts From 1-Hr energy arbitrage in Europe 

Rystad Energy’s analysis compared potential profits from 1-hour energy arbitrage in European power markets under two scenarios. Under the 15-minute markets scenario, one arbitrage cycle requires four charging and four discharging steps. In the 60-minute markets scenario, the same cycle needs only a single charge and discharge. The results suggest that shifting to shorter trading intervals could enhance revenue opportunities for European storage operators.

However, there is an important caveat. Today’s unusually high arbitrage margins, roughly +$150 per MWh, are not expected to persist over the next 10–20 years. A more realistic long-term average is around $60 per MWh, corresponding to an internal rate of return (IRR) of about 6% from pure energy arbitrage. Increased market granularity could lift average revenues to roughly $70 per MWh, adding around three percentage points to IRR.

“The biggest challenge for earning money through arbitrage is that price volatility is unpredictable. In Europe, 15-minute markets only started two months ago. Australia, however, switched from 30-minute to 5-minute markets in 2021, and since then the finer time intervals have consistently increased arbitrage profits,” adds Soltani.

For example, in Australia’s New South Wales state, 5-minute pricing has produced about 20% higher yearly arbitrage revenues than the old 30-minute system. In Victoria, 5-minute prices have generated around 15% higher revenues for 1-hour arbitrage over the past four years.

Ultimately, arbitrage opportunities can serve as a useful indicator of potential maximum profits for a BESS project. However, real-world arbitrage revenues on day-ahead markets will be lower once factors such as efficiency losses, system availability, market liquidity, and hedging strategies—designed to mitigate reliance on one-off extreme price spikes—are considered.