The Development of Large-Scale BESS in Sweden A Technology Monitoring Analysis of Trends, Drivers, and Barriers

Abstract

The rapid transition of the Swedish power system, driven by electrification and an increasing share of variable renewable energy, has created the need for flexibility resources. This has led to a significant expansion of large-scale Battery Energy Storage Systems (BESS). The aim of this thesis is to map the current BESS market landscape in Sweden and to analyze the underlying drivers, structural barriers, and future trajectories. The study applies a mixed-methods approach, combining a quantitative mapping of Swedish BESS projects exceeding 1 MW with a qualitative analysis based on 19 semi-structured interviews with key industry actors, including project developers, system operators (DSO/TSO) and authorities. The findings are interpreted using three complementary theoretical lenses, the Technology Life Cycle and S-curve, the Multi-Level Perspective, and the Technological Innovation System framework, applied as conceptual tools rather than as a structuring framework. The results show that the market has grown rapidly to approximately 1,3 GW of confirmed operational capacity, initially driven by exceptional profitability in the FCR-D ancillary service market. Following its saturation, the market has recalibrated toward mFRR participation, energy arbitrage, and value-stacking across multiple revenue streams. New application niches are also emerging in co-location with renewables, industrial peak shaving, and local grid flexibility, alongside a technical shift toward longer storage durations. The key barriers identified are predominantly institutional: regulatory ambiguity around BESS classification, a fragmented DSO landscape with inconsistent standards, opaque grid connection processes, and a misalignment between commercial incentives and broader systemic value. These constitute blocking mechanisms slowing the market’s transition into a full growth phase. The thesis concludes that the future trajectory of Swedish BESS depends less on technical readiness than on whether the institutional landscape can adapt to match the pace and direction of market development.