BESS (Battery Energy Storage System)
A grid-connected battery installation that absorbs electricity when prices are low or surplus power is available, and discharges it when needed. In Estonia, BESS projects are built primarily for frequency-reserve revenue (FCR, mFRR) plus spot-arbitrage stacking.
A Battery Energy Storage System (BESS) is a grid-connected installation that absorbs electricity when it is cheap or surplus and discharges it when it is expensive or scarce. The core product is the time-shifting of energy on a sub-hourly to multi-hour horizon. Modern grid-scale BESS is overwhelmingly lithium-ion (LFP chemistry dominating new builds since 2023) and arrives as containerised systems with battery racks, climate control, fire suppression, a battery management system (BMS), and a bidirectional inverter.
How BESS is sized
Two numbers: power (MW) and energy (MWh). A "1 MW / 2 MWh" battery can deliver one megawatt of charge or discharge for two hours straight. The ratio MWh ÷ MW is the duration; "1C" means one-hour duration, "0.5C" means two-hour. For Estonian frequency-reserve markets, 1C–2C systems are the sweet spot. Round-trip efficiency on new Li-ion BESS is 85–92%; that loss plus calendar/cycle degradation is the gross margin you have to clear.
Where BESS makes money in Estonia
In 2026 Estonian conditions, mFRR capacity is the largest single revenue line for grid-scale batteries — see mFRR explained. FCR pays steady but smaller; aFRR is intermediate. Pure spot-price arbitrage in EE/FI bidding zones contributes 5–15% on top, depending on the year. Stacking — bidding into multiple markets simultaneously and re-allocating the same megawatt-hour where it earns most — is what separates a 12% IRR from a 22% IRR.
Aggregation
Small BESS (< 1 MW) typically cannot prequalify for balancing markets alone — the technical thresholds were designed around centralised assets. An aggregator (a BSP) pools many small batteries into a single virtual unit and bids them as one. This is the legal structure behind most home battery flexibility programmes in 2026.