Lee Todd, VP, Energy & Carbon at ABB Electrification Service, argues that the real challenge is not battery duration, but how to make storage financially viable for the businesses that need it most.
When Texas regulators decided last August to maintain a four-hour minimum duration requirement for battery energy storage systems participating in non-spinning reserves, the industry reacted in predictable fashion: some storage operators cried foul, analysts warned of reduced grid resilience, and market commentators debated the technical merits of four hours versus one.
Similar debates are playing out across the globe, including here in the UK. And I think something has been missing from the wider discussion. As battery storage has matured, regulatory attention has increasingly focused on front-of-the-meter applications, where the imperative of system-wide grid stability naturally centres attention on grid operators and centralised assets. While regulators and market participants argue over battery specifications, behind-the-meter storage has remained comparatively underdeveloped and largely shaped by industry rather than policy.
We rarely step back to question the underlying assumption that grid stability must continue to rely on reserve models designed for a fossil fuel system. Why are we still designing energy storage policy and business models primarily around technical specifications for centralised assets, rather than around accessibility and adoption for the businesses that ultimately consume and depend on power?
The challenge is that, while the UK battery storage market has grown substantially, with RenewableUK reporting that operational capacity reached 6.5GW in 2025 and could hit 27GW by 2030, deployment remains concentrated among large utilities and well-capitalised developers. The economics that determine whether smaller commercial and industrial businesses can actually deploy battery storage have not received the same attention, and that needs to change. As a result, many businesses remain dependent on spinning reserve and diesel-based backup – systems that are increasingly expensive, carbon-intensive, and poorly suited to a modern grid.
The biscuit factory problem
Consider a typical manufacturing operation – for the purposes of this thought experiment, let us take a biscuit factory, as that is an example I often use. The plant manager faces three competing pressures: keeping production costs down, maintaining 24/7 operations, and meeting increasingly stringent carbon-reduction targets. Battery storage could, in principle, help address all three. It could store cheaper off-peak electricity for use during more expensive demand periods. It could provide backup power to reduce the impact of outages. It could enable greater use of on-site renewable generation.
But the problem is that the same plant manager has already spent the last decade making incremental efficiency improvements. They have replaced sodium lighting with LEDs, achieving a 60% energy reduction. They have converted heating systems from gas to electric. They have installed rooftop solar. Each year, finding the next carbon-reduction measure becomes more expensive, and the capital budget becomes more constrained.
And now they are being asked to invest hundreds of thousands – sometimes even millions – of pounds in a battery system. Even where the ROI case looks compelling, that can still be a non-starter. The capital simply is not there. So many businesses default to the familiar: fossil-fuel generators kept as spinning reserve for insurance, burning fuel, emitting carbon dioxide, and sitting idle most of the time; while expensive demand charges are absorbed and renewable energy potential remains underused.
The conversation we’re not having
This is the discussion regulators and industry stakeholders are not pursuing with enough urgency. As debates continue around capacity markets and revenue-stacking strategies, thousands of British businesses are making a simpler calculation: under traditional ownership models, they cannot afford batteries at all. The result is a system-level paradox: we invest billions in clean generation, yet continue to rely on fossil-fuel standby capacity to keep the lights on.
One possible route through this is to look more closely at service-based commercial models. Battery Energy Storage Systems-as-a-Service (BESS-as-a-Service) is one example of an approach that may help improve the economics of batteries and support a move away from spinning reserve as the default model for resilience. By removing upfront capital expenditure and converting it into operational expenditure, it can allow businesses to access fast, flexible, low-emissions reserve capacity without owning the asset. Rather than purchasing and maintaining a battery system, businesses pay for availability and performance.
Outcomes, not ownership
Some might see this as financial engineering, but it also reflects a broader shift in how businesses think about energy assets. Most businesses do not want to be in the battery business any more than they want to be in the lighting business or the HVAC business. A logistics company wants to move parcels efficiently. A data centre wants to keep servers running, and a food manufacturer wants to produce biscuits. What they need is not spinning reserve sitting idle, but resilience delivered efficiently. What they need from energy storage are outcomes: lower costs, higher resilience, and a reduced carbon footprint – not the burden of owning and maintaining complex electrochemical systems, or of determining how best to integrate them into their core operations.
The shift from CapEx to OpEx can also transfer risk. Under traditional ownership, the business bears the cost of equipment failures, performance degradation, and end-of-life disposal, along with associated internal processes and indirect costs. Under an as-a-service model, those risks largely sit with the provider, who may be better placed to manage them at scale and insure against them. For businesses already operating with tight margins and uncertain energy costs, that risk allocation may be an important enabler of battery storage adoption.
Moreover, service-based models may open the door to participation in energy markets that would otherwise be inaccessible. In the UK, merchant revenues from wholesale trading and balancing services are becoming increasingly important, but they also carry significant exposure to volatile electricity prices. Under an as-a-service arrangement, that exposure can sit with the provider rather than the business, allowing companies to benefit indirectly from market participation without taking on the full downside risk. This is where the contrast with spinning reserve becomes clearer: diesel generators are typically a pure cost centre, while batteries may be able to create value by generating revenue, reducing carbon footprint, and lowering operating costs. Those are value streams conventional diesel backup cannot usually provide.
Solving for scale, not specs
I am not suggesting that technical specifications do not matter. They always do in our line of business. Battery duration, power rating, and state-of-charge requirements all have legitimate engineering and grid-stability implications. But when we make those technical debates the centre of the storage conversation, we risk obscuring the more fundamental question: why are we still anchoring grid resilience to reserve models that assume fuel must be burned to provide stability? How do we make storage accessible to the thousands of businesses that need it but cannot afford to buy it? How do we make greater behind-the-meter deployment possible?
The energy transition will not succeed if it remains the preserve of well-capitalised utilities and large corporations. It requires solutions that work for the biscuit factory, the logistics depot, the car dealership, and the office building. That also means rethinking reserve capacity. There is a strong case for moving away from spinning assets held on standby towards digital, fast-responding systems delivered as a service. That means moving beyond debates about technical specifications alone and towards business models that can make clean, reliable and resilient energy storage more widely accessible.
If the UK is serious about reaching its 2030 climate targets, battery storage will need to be deployed at scale across sectors, not just among major players operating mainly in front of the meter. That means devoting as much effort to solving the accessibility challenge as to optimising technical specifications. The technology is increasingly mature. The commercial options are expanding. What now needs to change is our attachment to outdated reserve paradigms – and our willingness to address the question of financial viability for the businesses that need storage most.
