In a grid like the National Electiricity Martket (NEM) in Australia the first mover value opportunity for batteries is in the ancillary services, particularly the Frequency Control Ancillary Services (FCAS) market. This is where the grid operator pays generators to maintain the close frequency tolerances required for the grid. It's this market where the Hornsdale (Tesla/Neoen) Power Reserve has earned a lot of its revenue. It's also a market that has been traditionally designed for slower acting coal and gas generators so that the extra fast response that a battery can provide isn't properly valued. In a more modern market design, batteries should be paid even more for FCAS services because their fast action means that less energy overall is required to maintain stable grid frequency. There is a limited market requirement for FCAS so there is a relatively finite amount of value that can be extracted for additional battery systems.
Arbitrage across fluctuations in energy market pricing appears to be a less lucrative revenue stream for batteries. (eg this article puts it at 12% of battery revenue: Big batteries earn $20 million over three months) However the continued interest in new big and bigger battery installations in Australia shows that there is still plenty of revenue and value to be captured for additional batteries coming into the market. It would appear that we have a very very long way to go before we reach a market saturation point for batteries in our energy markets.
