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Preliminary study of large-scale battery energy storage and P2X solutions for the Kaustinen sub-region
6/2025–12/2025, Kaustinen
The Kaustinen sub-region is developing its vitality and competitiveness by promoting renewable energy investments in the area. As part of the KASE ESSI project, the aim was to assess whether large-scale battery energy storage systems, as well as hydrogen and e-methane production, could be implemented in the region.
The goal was to gain a clear understanding of the conditions under which these investments would be technically feasible and financially viable. To support decision-making, the project required an impartial, data-driven analysis of the investments, risks and market opportunities.
Despro was responsible for the techno-economic preliminary study in work package 3 of the project.
“The objective of the work is to carry out a concept-level preliminary study of four case packages, including the joint assessment of a solar park and battery system, the techno-economic evaluation of standalone batteries, and the benefits of a co-located battery in connection with a wind farm.”
Analysis of implementation options for battery energy storage and P2X solutions
The study analysed four alternative implementation models, representing different ways of utilising renewable electricity and energy storage in the region.
The assessment covered a 50 MW hydrogen and e-methane production concept based on electrolysis, a small 1 MW / 2 MWh standalone battery, a large 50 MW / 50 MWh standalone battery, and a 50 MW / 50 MWh battery located in connection with a wind farm. The study also evaluated the interaction between a solar park and a battery system, as well as the participation of battery energy storage systems in reserve and electricity markets.
In the P2X concept, the analysis covered hydrogen production through electrolysis, carbon dioxide capture, and the methanation of hydrogen and carbon dioxide into synthetic methane. The analysis also considered how the processes could be connected to regional infrastructure.
Key project challenges
The project combined battery energy storage, wind and solar power, and industrial-scale P2X processes. This meant that technical modelling and market analysis had to be integrated into one comprehensive assessment.
Profitability was strongly linked to electricity price volatility and utilisation rates. In hydrogen and e-methane production, the key challenges were high capital costs and dependence on low-cost electricity.
In the Kaustinen region, the availability of carbon dioxide and the utilisation of surplus heat also set specific boundary conditions for feasibility.
For battery energy storage systems, uncertainty was created by fluctuating market revenues and multi-market optimisation. In P2X solutions, technology risks and the development of the regulatory environment affected the overall investment risk profile.
Data-driven analysis to support investment decisions
Profitability was strongly linked to electricity price volatility and utilisation rates. In hydrogen and e-methane production, the key challenges were high capital costs and dependence on low-cost electricity.
In the Kaustinen region, the availability of carbon dioxide and the utilisation of surplus heat also set specific boundary conditions for feasibility.
For battery energy storage systems, uncertainty was created by fluctuating market revenues and multi-market optimisation. In P2X solutions, technology risks and the development of the regulatory environment affected the overall investment risk profile.
Despro carried out the work as a techno-economic preliminary study combining technical modelling, investment calculations and market analysis.
The work included a technology and market review, concept-level process descriptions and energy balances, as well as estimates of investment and operating costs. Payback periods were also modelled, and sensitivity analyses were carried out for changes in electricity prices, utilisation rates and market revenues.
Depending on the scenario, the payback periods for large battery systems ranged from approximately two to nine years. The profitability of P2X solutions proved to be significantly more sensitive to electricity prices and utilisation rates. The study also identified the region’s strengths, such as the availability of renewable electricity, as well as key constraints related to infrastructure and heat utilisation.
The project was led by an experienced team of BESS and P2X specialists, ensuring that the analysis was based on realistic assumptions and up-to-date market data.
Enabling controlled energy and industrial development in the region
The study enabled the Kaustinen sub-region to advance its energy and industrial development in a controlled, phased and knowledge-based manner.
As a result of the work, the Kaustinen sub-region gained:
- A clear comparison of different investment options
- A realistic view of payback periods and risk levels
- An understanding of how fluctuations in market revenues affect profitability
- A concrete and well-founded basis for further development decisions
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Large-scale battery energy storage and P2X projects require careful techno-economic assessment before investment decisions are made.
Despro conducts preliminary studies that bring clarity to investment profitability, risks and feasibility. Get in touch, and we will help build a realistic and strategically sound path forward for your project.
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Jarkko Heikura has a long background and experience in the industry. She can create a customized service according to the needs.