Revenue Stacking Strategies for BESS in European Power Markets

The rapid growth of renewable energy in liberalized electricity markets has in- creased both price volatility and the need for flexibility. Battery Energy Storage Systems (BESS) are a promising solution, offering fast response times and the ability to shift energy across time. However, relying on a single application, such as intraday arbitrage, rarely provides sufficient revenues to justify the in- vestment. As a result, battery owners and operators increasingly adopt revenue stacking models, where a BESS participates in multiple markets and services to combine different value streams. This thesis explores revenue stacking strate- gies for BESS in power markets, with a particular focus on the European context. It reviews the main revenue streams for BESS and explores the tools needed to capture maximum value from them, including stochastic optimization, robust scheduling and heuristic methods. The main aspects of the discussion here are their ability to capture uncertainty, handle market complexity, and account for practical constraints such as degradation. To complement the review of the existing strategies, the thesis presents an extensive example of a daily BESS op- timization problem. Using market data, the example illustrates how a battery can allocate its capacity across different services — such as intraday arbitrage and balancing reserve provision — while respecting operational limits. This example highlights in practical terms both the opportunities and the challenges of implementing revenue stacking in real markets. The results suggest that stacking revenues can substantially improve the business case for BESS, though the most profitable strategies depend on local regulations, market design, and asset characteristics.