The single most common error in storage procurement is comparing quotes that are not comparable. Here is the distinction that resolves it.

A developer asks three suppliers to quote for "a 2 MW battery." Three quotes arrive: 480,000 EUR, 620,000 EUR and 940,000 EUR.

The natural conclusion is that the first supplier is cheapest. The correct conclusion is that the question was incomplete.

Two different quantities

Power, measured in kilowatts or megawatts, is a rate. It describes how fast the battery can charge or discharge. It determines the size of the inverter, the switchgear, the transformer and the cabling.

Capacity, measured in kilowatt-hours or megawatt-hours, is a quantity. It describes how much energy the battery holds. It determines the number of cells, and it is where most of the cost sits.

The two are linked by duration:

Capacity (MWh) = Power (MW) × Duration (hours)

A 2 MW battery may be a 2 MWh system with one hour of duration, or an 8 MWh system with four. The cost differs by roughly a factor of three. Both are correctly described as "a 2 MW battery."

The three quotes above were probably for one-hour, two-hour and four-hour systems respectively. All three were honest.

Why per-MW pricing misleads

Two real projects illustrate this. In North Macedonia, a 62 MW / 104 MWh system was contracted at approximately 293,000 EUR per MW. A separate 50 MW / 200 MWh system was financed at approximately 480,000 EUR per MW.

On a per-megawatt basis, the second project cost 64 percent more. On a per-megawatt-hour basis — the meaningful measure — it cost 31 percent less: 120 EUR/kWh against 175.

The second project was cheaper. Per-MW pricing showed the opposite.

Which quantity earns the revenue

The distinction is not academic, because different revenue streams depend on different quantities.

Arbitrage depends on capacity. How much energy you can move from a low-price hour to a high-price one is a function of MWh. Adding power without capacity lets you discharge faster; it does not let you sell more.

Ancillary services depend on power. Frequency regulation and reserve provision pay for the ability to respond quickly and at scale. These markets favour high-power, short-duration systems.

Grid connection limits power. If your export licence permits 990 kW, a 3 MW battery cannot deliver 3 MW to the grid regardless of what it can do internally.

Regulatory compliance often specifies both. Several regional regimes now require storage equal to a percentage of installed inverter capacity, with a stated minimum duration. A system meeting the power requirement but not the duration requirement does not comply.

Getting a comparable quote

Three specifications produce comparable offers:

Power in kW or MW. What the system must deliver.

Capacity in kWh or MWh. What it must hold.

Scope. Whether the price includes the power conversion system, transformer, switchgear, thermal management, fire suppression, control system, civil works, installation and commissioning — or only the DC blocks.

The gap between a DC block price and a turnkey price is frequently close to a factor of two. It is the single largest source of budget failure in storage procurement.