Modo Energy

Extending duration can boost earnings by up to 88% over a battery’s lifetime. Augmentation, the process of increasing a battery energy storage system’s capacity, is a way to achieve this. Batteries are participating more than ever in high-energy, high-cycling services such as wholesale trading and the Balancing Mechanism. In these services, longer durations and therefore greater energy capacities, are becoming more important. In 2024, two-hour batteries in Great Britain earned 37% more than one-hour batteries and can earn over 88% more over their lifetime. Augmentation is becoming cheaper due to falling battery cell costs. However, technical and commercial limitations will determine which method of augmentation is appropriate for a battery site, if at all. To understand more about augmentation, the different methods and the potential benefits access the article here - https://lnkd.in/etkjf745

Only an estimated 200 GW out of the current 700 GW proposed connection queue pipeline will be needed to meet Great Britain's electricity demand. Meaning many projects will never reach completion. It's become clear that the connection current system, where projects are connected on a ‘first in, first connected’ basis, is creating major delays. As net-zero deadlines approach, there’s growing pressure to connect more renewable energy and improve the grid connection process. Ed Birkett - Director of New Projects at Low Carbon, UK Development, joins Ed Porter in today's episode. The conversation looks at: ▶ How changes in Contracts for Difference auctions could help reach net zero targets. ▶ Issues with long lead times for integral equipment needed for grid connections. ▶ The state of the grid connection queue and what can be done to improve the system. ▶ Insight into the types of costs involved at each stage of the development process for solar. ▶ Why we need to find a balance between strategic planning and the market-based approach to connecting to the grid. You can listen to this episode - and every previous episode of Transmission - on your favourite podcast app, or via the link here: https://lnkd.in/eiiUnwq9 If you know somebody who would make a great future guest, let us know by sending a message to our producer Ysabelle Swan

Want to get a headstart in learning about the power sector in GB? How the grid works, power markets - we've got you covered. The beginner's guide to the GB power sector is a one-stop shop for all the resources some of our new starters have found useful for getting up to speed in the industry. This includes the Future Energy Scenarios, podcasts, and our very own Energy Academy. Check it out in the link below, and let us know if there's something you think we've missed - we'll be keeping it updated with anything new that pops up. https://lnkd.in/eEhtT2eH

Two-hour batteries are earning over twice as much for their second cycle as one-hour batteries so far in 2024. Batteries have averaged 1.1 cycles per day so far in 2024, with one-hour systems cycling more than two-hour. However, some individual batteries, especially one-hour systems vary their cycles - cycling on certain days, and less on others. On average, one-hour battery cycling ranges from 0.1 to 2.5 cycles per day. Despite this, two-hour batteries have gained the most from increasing their cycling rate. On average, a 2nd cycle for two-hour batteries has increased revenues by 70%, compared to just 26% for one-hour batteries. This difference is all down to the revenue strategies pursued by one-hour and two-hour systems - and the different frequency response services they perform. Modo energy subscribers can read the full article to find out why the value of a cycle is so different for one and two-hour batteries here: https://lnkd.in/e-bz523f #BatteryEnergyStorage #NetZero #FrequencyResponse

Degradation risks battery Capacity Market contracts being terminated - so what options are available to avoid this? In an update to the Capacity Market Rules, DESNZ clarified the options available for battery energy storage and introduced a new route via secondary trading. Batteries with long-term Capacity Market contracts must perform Extended Performance Tests (EPTs) at various points throughout the contract to prove the system's duration. To pass the test, the system must be able to export around 95% of its stated connection capacity for the duration selected at prequalification. Battery degradation reduces available energy capacity over time, which harms the ability of the system to pass. Ultimately, if the battery fails the Extended Performance Test, it risks having its Capacity Market contract terminated. To avoid this risk, batteries can 'augment', refreshing cells within the systems or replacing the batteries entirely to bring the site's energy capacity above the required level. Alternatively, some or all of the unit's Capacity Market obligation can be secondary traded away, reducing the EPT requirement. This was introduced in the recent rule change, and, importantly, only applies to contracts from October onwards. Check out the full explainer for more information about Extended Performance Testing and the options available for batteries to manage the risk of degradation, just click the link below: https://lnkd.in/egwChHZ8

Battery energy storage revenues have dropped by two-thirds since 2022, as frequency response markets saturated and prices fell. However, changing fundamentals, such as an improving price shape and a growing proportion of renewable generation, are expected to increase revenues from this point. We’ve just updated our GB BESS Outlook for Q3 2024. In three parts—markets, revenues, and investment—we examine how this might change in the future. In the executive summary, we highlight the main themes to get you up to speed. Head to the platform to read the full Outlook.

National Grid ESO has released its annual Future Energy Scenarios report for 2024, outlining potential pathways to achieving net-zero carbon emissions by 2050. Storage plays a crucial element in the transition to a clean energy future. However, for batteries to successfully fulfil their role, significant system changes are necessary. From refining the grid connection process to optimizing how batteries are dispatched by the control room. There are lots of updates already underway and more yet to happen allow batteries to fulfil their role in the pathways set out. In this episode, ESO's Strategy and Policy Director , Claire Dykta, returns to discuss: ▶ The ESO’s Future Energy Scenarios: Pathways to Net Zero framework and the key actions required to achieve it. ▶ The evolving role of energy storage and the future needs of the network. ▶ The proposed shift in connection policy from a "first come, first served" to a "first ready, first connected" system. ▶ Insights into the initial months of the Open Balancing Platform (OBP). ▶ The impact of the multi-dispatch tool and other recent changes that have increased the utilization of batteries in the balancing mechanism. You can listen to this episode - and every previous episode of Transmission - on your favourite podcast app. If you know somebody who would make a great future guest, let us know by sending a message to our producer Ysabelle Swan

Want to keep on top of everything you need to know about battery energy storage? Are you after an easy-to-digest summary of all Modo research? Sign up for our two free weekly newsletters for the latest research and updates on the GB and ERCOT markets. In last week's GB newsletter, we introduced our BESS investment case outlook and reviewed the latest battery tolling agreement. Subscribe here: https://lnkd.in/e92_gwxr

Cycles and revenue were closely linked for two-hour batteries in July 2024. Hawkers Hill was the highest-earning battery, and the only two-hour battery to average more than 1.5 cycles per day. On average, performing an extra cycle resulted in an extra £2k/MW in revenue - 75% of the GB BESS index for two-hour batteries in July. The link between cycles and revenues was less clear for one-hour batteries. Capenhurst 4 was the highest-earning system, but performed fewer cycles than 20% of one-hour batteries. Head to the article on the Modo platform now to find out how, link here: https://lnkd.in/eYqqPBPE

The 2025 edition of the Capacity Market was launched at the start of August and confirms some good news for battery energy storage. Battery derating factors have increased for the next auctions, due to a change in methodology. This has resulted in a 20% relative increase in T-1 derating factors from last year, and a 35% relative increase in T-4 derating factors. This means batteries can win contracts for a higher amount of derated capacity, increasing revenue at a given price. The change in derating methodology also removes the previous step at high durations, which resulted in some interesting bidding behaviors in this year’s T-4 auction. Meanwhile, target capacities for the two auctions have also been announced. The T-1 auction is targeting 6.5 GW, a slight decrease from last year. Meanwhile, the T-4 auction has the same target capacity as last year, with a 44 GW target. The pre-qualification window is open until October 1st, and auctions will take place in March 2025. #BatteryEnergyStorage #CapacityMarket #NetZero