Premium

Finland moves to 2-hour durations as Neoen launches largest BESS in Nordics

January 30, 2024
LinkedIn
Twitter
Reddit
Facebook
Email

IPP Neoen has started construction on a 2-hour 56.4MW/112.9MWh BESS in Finland, in the context of market dynamics which optimiser Capalo AI explained to Energy-Storage.news.

The Paris-headquartered independent power producer (IPP) announced construction on the Yllikkälä Power Reserve Two (YPR2) project last month (27 December), describing it as the largest battery energy storage system (BESS) in the Nordics.

The BESS project will be in Yllikkälä, near Lappeenranta city, and will be next to the 30MW/30MWh Yllikkälä Power Reserve, Neoen’s first BESS in Finland which is already online.

System integrator Nidec ASI will provide the BESS, power conversion equipment and engineering, procurement and construction (EPC) services for the project, which will connect to grid operator Fingrid’s Yllikkälä substation and is expected to come online in the first half of 2025.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

Not ready to commit yet?
  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

Neoen will be the long-term owner and operator of the project, which builds on its substantial wind presence in Finland.

Market and regulations driving a move to 2-hour durations

The project is noteworthy not just for its size but its 2-hour duration, in a market where projects have typically been largely 1-hour and focused almost entirely on targeting the country’s different ancillary service revenue opportunities (mFRR, aFRR, FCR-N, FCR-D, and FFR).

Henri Taskinen, CEO of Finland-headquartered BESS optimisation firm Capalo AI, explained that this move is down to a new regulation from Fingrid and an increase in electricity market trading opportunities.

“The market is shifting to longer duration (mainly 2-hour) BESS for a couple of reasons. Firstly, the Nordic TSOs developed a new regulation for batteries, which went live on 1 September, 2023. The regulation addresses ‘Limited Energy Reservoirs,’ meaning under 2-hour batteries, and largely affects 1-hour systems,” Taskinen said.

The regulation effectively limits the amount a 1-hour BESS can bid into ancillary services when compared to a 2-hour (or more) system.

An example Taskinen cites is a 10MW/10MWh battery, which would be limited to bids of 5MW for FCR-N (from 10MW prior) and 8.3MW for FCR-D up and down when bidding simultaneously (previously 10MW as well). A 2-hour BESS would not face these constraints which is a major reason the market is shifting to 2-hours.

The new regulation appears similar to rules which the grid operator in Texas, US, tried to implement but were recently shot down by its energy regulator (Premium access).

The other factor is market-driven. As seen in other European markets with more BESS online like Germany and the UK, opportunities for BESS in energy trading are growing as volatility increases which is increasing the business case of 2-hour systems.

Taskinen: “This is one key factor to consider when acquiring BESS assets and choosing the right optimiser and market access partner. Longer duration assets earn more revenues from wholesale market volatility when optimised intelligently. We believe the revenue stack will shift to wholesale, as seen in Germany.”

Energy-Storage.news’ publisher Solar Media will host the 9th annual Energy Storage Summit EU in London, 20-21 February 2024. This year it is moving to a larger venue, bringing together Europe’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place. Visit the official site for more info.

Read Next

October 17, 2025
Powerlink Queensland is seeking federal approval for transmission infrastructure connecting AGL Energy’s 2,000MWh Tuckeroo battery energy storage system (BESS) to the Western Downs Substation in Australia.
October 15, 2025
The value of developers and optimisers in the BESS lifecycle, thinking about long-term risk and KPIs for maximising the asset have been key themes at the Battery Asset Management Summit UK & Ireland 2025.
October 15, 2025
A flurry of grid-scale BESS project progress totalling more than a combined 1.5GWh in the past week, from Renalfa in Bulgaria, Engie in Romania, Nala Renewables in Finland and Metlen in Greece.
Premium
October 14, 2025
We catch up with the CFO and co-founder of German BESS own-operate platform Terra One, after its €150 million (US$173 million) mezzanine financing to scale up in Europe’s hottest energy storage market.
Premium
October 14, 2025
Battery storage equipped with optimisation platforms not specifically designed for Australia’s NEM missed revenue opportunities during the 10 October price spike, according to Sahand Karimi, co-founder and CEO of OptiGrid.

Most Popular

Email Newsletter