How is your battery really performing? Open Energi's Jonathan Bosch gives his views about why it is so difficult to compare.
Open Energi's Jonathan Bosch Head of Data Science, shares his overview of how asset duration affects revenue performance.
Thanks, Modo Energy for providing easy access to market data. Below I’ve taken a snapshot look at annual revenues for the top 48 performing grid-connected batteries in 2022.
There’s of course no right way to compare or benchmark battery revenue performance since there are so many unseen requirements and constraints, not least the specific goals of the asset owner and/or operator, in conjunction with a large variety of warranty restrictions. But in today’s volatile and endlessly evolving flex markets, investors inevitably want to see their assets capturing value if and when it fleetingly appears.
If we take a look at annual revenues by duration (i.e. how many MWh of energy storage for every MW of power capacity), we can see some clear winners - systems at the 2-hour end of the scale have been able to exploit trading on day ahead and intra-day markets, fully utilising their deep reservoirs of energy capacity.
The market is still dominated by 1-hour systems that have to manage their energy reserves carefully in order not to miss out on wholesale spreads, while also providing frequency services. In 2022, the vast majority of revenues still came from ancillary services, which have captured some extremely high prices (and some very low ones too). In 2023, I’m sure this picture will look even messier as optimisers will have to better predict where the trading opportunities are going to come from, and manage even more carefully how and when to spill that energy.
In that sense, Optimisers still have to prove they can exploit every opportunity markets have to offer. In such a fast-changing landscape that’s no easy feat. As we accelerate towards an ambition of 20GW of battery storage, wholesale markets are fast becoming the dominant value stream, but those markets are not infinitely deep, so revenue stacks including BM and other new Grid services are crucial for optimisers to explore while aiming to deliver robust and consistent revenue streams in the long term.
It is great to see an OE-optimised asset punching above its weight when compared to similarly sized batteries.