Smarter Together: How Demand Flexibility and Battery Storage Complement Each Other

Two Tools, One Shared Goal

Every electricity grid faces the same daily challenge: demand spikes in the morning when people wake up and in the evening when they return home. At peak moments, the grid must produce — or import — electricity that may cost 5–10× the overnight price. Grid operators and households alike can help solve this in two complementary ways.

The first is supply-side: battery storage farms that charge overnight and discharge during peaks. The second is demand-side: moving consumption itself to off-peak hours so the peak is smaller. This article looks at both — their real costs, efficiency, and CO₂ impact — and shows how they work together toward a cleaner, more stable grid.

Grid-Scale Battery Investment in the Region

Since the Baltic states synchronized to Continental Europe in February 2025, grid-scale battery storage has become a strategic priority. Here is the current state of BESS deployment across the four countries that Elewatt serves.

Sources: ess-news, energy-storage.news, Fingrid, Elering, EBRD. Costs are all-in project costs including grid connection.

What Does It Cost to Move 20 MW?

The 10,000 homes in the Elewatt example can collectively shift approximately 20 MW of load — comparable to one medium-sized industrial customer, and about 1.25% of Estonia's peak demand. How much would it cost to achieve the same 20 MW of peak relief through battery storage?

A standard 4-hour battery system at 20 MW needs 80 MWh of storage. Using actual costs from Baltic projects and European averages, the capital cost is consistently in the tens of millions.

This is not perfectly like-for-like: a battery can discharge at any time for any duration, while demand response requires time-flexible loads. For frequency regulation, industrial backup, or 24/7 dispatchability, batteries remain essential. But for peak shaving — reducing consumption during predictable morning and evening peaks — smart demand shifting is functionally equivalent and dramatically cheaper. In practice, the strongest grids use both: batteries for fast-response services, smart devices for the daily peaks. Widespread smart home adoption can significantly reduce how much grid-scale battery storage needs to be built.

The Hidden Efficiency Tax

Every time energy flows through a battery, some is lost to heat in the cells, inverters, and cooling systems. Modern lithium-ion battery storage achieves 88–92% AC round-trip efficiency. That means for every 100 kWh charged overnight, only 88–92 kWh is available to discharge at peak. The 8–12 kWh gap is wasted.

Demand shifting has no such loss. A water heater that runs at 2am instead of 7am uses exactly the same energy — heating the same water to the same temperature. The only "loss" is a small amount of additional standby heat from the tank over those extra hours: typically 1–3% for a well-insulated boiler.

At scale, this matters. A 20 MW battery farm cycling daily at 90% RTE wastes 8 MWh per cycle. At Estonia's average grid carbon intensity (417 gCO₂/kWh in 2024), that is an additional 3.3 tonnes of CO₂ per day — just from charging losses.

CO₂ Impact: When Shifting Consumption Actually Helps

Demand shifting does not reduce total energy consumption — it reschedules it. Whether that saves CO₂ depends entirely on what type of generator is running during peak versus off-peak hours.

In Estonia, the answer is clear: winter morning peaks are often served by oil shale or gas plants, while nights increasingly run on wind. Peak CO₂ intensity can reach 600–900 gCO₂/kWh versus 50–150 gCO₂/kWh at night. Shifting 80 MWh from a high-carbon peak to a low-carbon off-peak saves roughly 36 tonnes of CO₂ per event — about 7,200 tonnes per year at 200 events.

In hydro-dominated grids like Norway or Sweden, demand shifting has little CO₂ benefit because off-peak generation is also near-zero carbon. The Baltics and Finland are different — peak periods pull fossil-fuel generation, making demand shifting meaningfully greener.

Scaling Up: Four Countries, One Shared Grid

Where do the 10,000 homes and 20 MW come from? Estonia alone has 230,000+ households without district heating that rely on electric water heaters and radiators. If just 10,000 of them connect a Shelly device to Elewatt and set a simple overnight filter, that already aggregates 20 MW of controllable load — equivalent to one medium industrial customer and 1.25% of Estonia's peak demand. Scale that across all four countries and the numbers become remarkable.

Each country in the Elewatt network has a large pool of households with shiftable electrical loads — water heaters, EV chargers, electric radiators — that currently run whenever is convenient, not when electricity is cheapest. The table below shows what full penetration would look like.

Assumes 2 kW average shiftable load per household (water heater or radiator at ~2 kW, EV trickle charger at 2.3 kW). Finland estimate based on ~900K electrically heated homes at ~65% penetration. Latvia/Lithuania based on ~25% of households without district heating. Savings at ~€200/household/year. Peak demand sources: Elering, Fingrid, Litgrid.

2,540 MW of flexible residential load exceeds the combined installed BESS capacity of Estonia and Latvia today (~317 MW combined) — and approaches the total battery storage installed across all four countries (~1,817 MW). This demand response potential is achieved without a single battery, without construction permits, and without the 18–36 months every large storage project requires.

For perspective: replacing 2,540 MW of demand response with equivalent battery storage at 4-hour duration (10,160 MWh) would cost approximately €2.5–3 billion in capital investment. The device hardware for 1.27 million households — one Shelly Plug S Gen3 each — costs roughly €32 million. That is a 100:1 cost difference, before accounting for the battery's 10% energy losses and the CO₂ emitted charging them.

The grids of Estonia, Latvia, Lithuania, and Finland are interconnected. Nord Pool prices are shared across borders. A cold January morning that pushes Estonian spot prices to €500/MWh also drives up prices in Finland and Latvia. Coordinated demand response across borders is a multiplier — reducing price spikes for everyone simultaneously.

How Elewatt Enables This

Elewatt is the aggregation layer that turns individual Shelly devices into coordinated demand response. Set a filter once — "run my water heater for 3 hours between 23:00 and 07:00" — and Elewatt identifies the cheapest window using real all-in prices including network fees, state taxes, and VAT.

1. 1Connect your Shelly device to Elewatt (takes about 5 minutes)
2. 2Set a duration filter — specify how many hours you need and the allowed time window
3. 3Elewatt downloads the next day's optimal schedule to your device each afternoon
4. 4Your device runs autonomously at the cheapest hours — no cloud connection needed overnight