Q&A - Habitat Energy: Optimising grid-scale batteries in a changing market

The energy world is changing fast. Solar and wind have gone mainstream. And batteries, once an afterthought, are now widely recognised as essential to balancing a grid powered by intermittent renewables.

In conversations around the energy transition, one thing is increasingly clear: clean power alone is not enough. Without flexible infrastructure to support it, the transition risks stalling. That is where Battery Energy Storage Systems (BESS) come in, often spotlighted for their role in grid stabilisation.

As batteries evolve from backup systems to critical, frontline assets and as co-located projects pairing storage with wind or solar become more common. Optimisation is no longer optional. It is the backbone of the transition.

But what happens after these systems are built? How are they operated? Traded? Adapted to rapidly shifting market conditions? This is something that is still under-discussed.  

To explore these questions, inspiratia sits down with Wilson Sink, Head of Contract Management at Habitat Energy, a battery storage optimiser operating across the UK, US, and Australia.

Founded in 2017, just as large-scale batteries were beginning to gain traction in the UK, Habitat Energy's focus was not simply on connecting storage to the grid. It was on turning flexibility into commercial value - in real time, across multiple markets, while navigating constantly evolving technical and regulatory landscapes.

How has Habitat Energy evolved in the renewable energy space?

When Habitat Energy launched in 2017, grid-scale batteries were still rare in the UK. The only major opportunity then was the Enhanced Frequency Response (EFR) tender, which supported just eight batteries. While net-zero goals and renewable deployment were growing, the need for flexible, real-time battery operation was only beginning to emerge.

We saw a clear gap — no one was focusing on how the inherent flexibility of battery storage assets could capture value from the wholesale market rather than just ancillary services. Traditional utilities were not set up to handle the speed and complexity of second-by-second trading across multiple markets. Our three founders, with backgrounds in energy research, thermal optimisation, and advanced tech, combined AI and human expertise to fill that gap, leading to the creation of Habitat Energy.

We have focused on battery storage optimisation from the start, initially in the UK and Australia. As we looked to scale, especially into the US, we considered various investment options. Quinbrook Infrastructure Partners ultimately invested, giving us the freedom to grow without short-term constraints. In November 2021, they acquired 100% of Habitat Energy, offering strategic backing while allowing us to retain operational independence.

We have been commercially operating grid-scale batteries since 2019 and now manage 3.3GW globally, including 1.5GW in the UK. Alongside BESS, our assets under management also include wind and solar PV.

What does it take to optimise a physical battery asset in a dynamic market environment?

By "optimisation" we do not mean a power purchase agreement or simple route-to-market service. For us, optimisation means managing a physical asset in a complex market environment. It includes developing and constantly adapting a tailored trading strategy for each individual asset, updated throughout the day, up to real-time delivery. For us, it is about bridging the physical and commercial to maximise asset value.

We do not handle on-site O&M, meaning we do not send engineers to the site, but we do monitor assets in real time. We have a dedicated asset operations team that tracks warranty terms, cycling limits, temperature, state of charge, duration, internet latency - basically any operational factor that affects performance. All of this informs our traders' market-facing decisions, helping to secure short-term value while maximising long-term asset performance.

The key question we are solving is: how do you trade a specific physical asset with its own constraints, depending on EPC, battery type, etc, in a market that demands both long-term planning and real-time execution?

As a global optimiser of battery storage and renewables, what kinds of assets do you work with?

Alongside BESS, we also provide optimisation services for wind and solar. We began as a battery optimiser, particularly in the UK, and expanded to other markets using the same core principles. But challenges around real-time decision-making and managing physical assets also apply to renewables. That is why we have expanded into renewable-only optimisation, especially in the US and Australia.

The aim is the same: to manage assets dynamically and make near-real-time decisions. The intelligence, including both tech and process, is highly transferable from batteries to renewables.

Traditional PPA models often stop at day-ahead optimisation. But events like last month's [March 2025] partial solar eclipse, which disrupted solar forecasts across Northern Europe, show the need for real-time responsiveness. That is the kind of problem we aim to solve in renewables.

We are also working on co-located projects, which include solar or wind paired with batteries sharing a grid connection. These come with added complexity: how do you manage a battery if there is a constraint on the solar farm? Or store excess solar behind-the-meter before exporting? Coordinated, intelligent optimisation across these hybrid assets is exactly what we are built for.

You mentioned Habitat does not have on-site O&M technicians. So, is the managing and monitoring of the assets done digitally?

Exactly. All our assets are managed remotely. We connect to sites via secure protocols - typically Modbus, APIs, or site-specific gateways, depending on the setup. That might mean connecting to the power plant controller, the EMS, or an on-site gateway.

This gives us real-time data at the container level - everything from cell temperatures and state of charge to dispatch levels, site frequency, and alerts like inverter issues. We receive this data second by second, which feeds into our optimisation platform. That platform drives trading decisions as asset conditions evolve throughout the day.

From an asset management perspective, real-time visibility lets us respond fast. If our system alerts us to an issue, say, rising container temperatures, our 24/7 operations team can immediately alert the site's O&M team.  Our goal is to maximise asset availability while maintaining safe operations.

Do you plan to expand beyond the UK, US, and Australia?

Those three are our core markets. We have been active in the UK since 2019, entered Australia soon after, and have been operating in the US (Texas) since 2022.

As for new markets, we look for places with strong merchant opportunities and complex trading environments where flexibility is valued and where services like frequency response or wholesale arbitrage have viable markets. We also value strong partnerships. If we can enter a market alongside a trusted asset owner with whom we have a long-term relationship, that is a strong signal for us.

We see a lot of potential in other US ISOs beyond ERCOT and are already in the process of expanding there. Europe is also on our radar, and we are looking at expanding into Germany and elsewhere.

What do Habitat Energy's revenue streams look like?

Our core model is battery optimisation - we earn when we create value. That is typically through a revenue share, sometimes with a small base fee to cover operating costs. But the principle is alignment: the more value we generate for the asset owner, the more we earn.

That means our revenue often comes from merchant activity – trading and re-optimising in wholesale markets, ancillary services, and other real-time opportunities.

We also partner with utilities or insurers to offer more stable, long-term revenue streams. They bring the balance sheet; we bring the optimisation expertise. It is a good match of financial security and smart operations.

In the UK, what kind of clients are you working with?

We work with a mix of clients, including listed funds like Gresham House, private equity-backed groups like Constantine Energy, and major utilities (though we cannot name all of them). That gives us broad market exposure - IPPs, institutional investors, and utilities are all driving storage growth.

As for trends, "scale" is the big one. What used to be a large project (20MW) is now dwarfed by projects like the UK's largest consented battery at 1.4GW. We are moving from small, distributed sites to developments that resemble full-scale power stations.

And to hit the UK's 2030 storage target to reach 20GW we will need that kind of speed and scale.

Are you seeing more standalone batteries or co-located projects?

Standalone batteries are still the main asset type we see. But co-located projects are making a comeback, especially due to the UK's grid connection issues. The queue is long, and securing a connection is a major bottleneck. One-way developers are tackling this by better using existing capacity. Rather than just solar or just batteries, we are seeing more projects that combine both and share a single grid connection.

Beyond the grid connection challenge, what other issues are you facing? Have they changed since 2017?

There are two main types: pre- and post-commissioning challenges. Getting sites online is still tough across the industry. Delays often stem from grid timelines slipping, construction setbacks, and skills shortages.

Funding is another hurdle. You need both equity and debt investors to get comfortable with the battery model, which is not as clear-cut as other energy assets. It takes education, time, and building confidence.

Once sites go live, the challenges are quite similar to those we saw early on. This space is still new and fast-moving. Market frameworks are constantly evolving. There are no fixed rules yet around battery participation, eligible markets, or compliance with the latest service requirements. The National Energy System Operator (NESO) is always updating expectations and obligations around battery behaviour, communications, and optimiser roles. It is a constant effort to keep systems up to date and stay ahead.

We also have to integrate and adapt to new services. For instance, Quick Reserve was introduced in December [2024] and will soon be accessible to non-Balancing Mechanism Units too. Building support for such services into our platform in a scalable, automated way is a major challenge, especially with products that did not exist a few months ago.

When do clients typically come to you - early or later in development?

That has evolved over time, reflecting a maturing market.

Early on, clients came during development - even pre-planning - wanting to understand the battery investment case. So we did a lot of education: how to operate across markets, revenue stacking, and supporting their investment committees.

Now, we still join early discussions, but they are more commercially focused, with questions about warranties or optimal durations based on current market conditions.

We get most hands-on around the final investment decision, when lenders get involved. That is when banks want experienced optimisers. It is not something you can build in-house overnight, so specialist partners like us get brought in. Typically, that is 18 to 24 months before the project goes live.

What about repowering or augmenting existing projects? How do you approach those?

Repowering or augmenting is usually done by the asset owner based on CapEx, battery degradation, and their market outlook.

We are just now seeing the first wave of UK batteries reaching the age where repowering makes sense. While the decision is not ours, we do advise clients. For example, we are seeing two-hour batteries perform better under current conditions, whereas four-hour ones are not quite there yet. We offer our insights to clients to help inform their choices.

Once a site is repowered, our challenge is managing the mix of old and new containers. A new four-hour system added to a degraded one-hour setup will behave differently. One part might suit frequency response, while the other is better for wholesale. We therefore need to think carefully about how to split the site, monitor each section, and handle different data streams or granularity from new OEMs.

In some cases, it is like managing a completely new site, even though it is technically the same project. That is how we are seeing repowering play out today.

Where do you see the BESS market heading in the next five years?

The next five years are about scale and speed. The Government's Clean Power 2030 target has set out the need for an additional 20GW of BESS by 2030. This flexibility capacity will be critical to help manage increased volatility from renewables build-out and deliver the types of reserve services previously provided by coal-fired plants, helping to keep the system stable and secure.

Growth in negative price periods — when excess renewable output needs mopping up — will drive new revenue opportunities, and improvements in NESO's control room should ensure greater despatch of batteries, making the most of these highly flexible, responsive assets.

Longer-term, the fundamentals of the net-zero transition will continue to drive demand for flexibility, underpinned by Government policy.

Execution is the real challenge. Across the board - ownership, asset management, EPCs, O&M, supply chains, transmission, grid connections - we need a major expansion in capacity and skills to deliver 20GW by 2030.

The ambition and direction of travel are right, but hitting the full target will require commitment and collaboration right across the industry. We are pleased to be playing our role, increasing value capture from BESS as the generation mix changes to drive investment in a clean energy future.