Last updated: 08 October 2026

AUS WEM Methodology

1. Introduction

Modo Energy provides benchmark data for battery energy storage systems across global energy markets, applying a standardised mathematical methodology to ensure consistency and transparency across all produced Indices.

1.1 Representation

Modo Energy's ME BESS AUS WEM Index is designed to track the performance of grid-scale battery energy storage systems in the WEM.

2. Index Construction

2.1 ME BESS AUS WEM Index

Modo Energy currently produces one Index to track the performance of battery energy storage systems in the WEM:

ME BESS AUS WEM: Includes all qualifying assets in the WEM.

2.2 Inclusion Criteria

An asset qualifies for the Index when it is a WEM battery in Modo's asset register with the data needed to place it in the fleet. In practice this means:

Market and technology: registered in the WEM as a battery energy storage system (BESS).
Identification: has an AEMO facility code, so its dispatch can be matched.
Capacity: has a nameplate rated power (MW) and energy capacity (MWh), used for the divisor.
Commercial operation: included from its commercial-operations date.

2.2.1 Asset Availability

Asset availability is assessed for each settlement day (AWST). An asset is considered active and included in the daily Index calculation if it has recorded market activity that day: revenue or operations in energy, FCESS or the Reserve Capacity Mechanism (RCM). Assets with no recorded market activity on a settlement day are considered inactive and excluded from the Index — both the divisor and the revenue — for that day. Note: a facility holding Reserve Capacity Credits records RCM revenue on every day of its Capacity Year, so it counts as active for those days regardless of merchant dispatch. This is an activity test, not a declared-availability or outage feed.

2.3 Asset Information

Published asset details (ownership, optimiser, rated power in MW, and energy capacity in MWh) reflect Modo Energy's best current view from public announcements and internal analysis. Capacities are based on nameplate figures.

2.4 Index Calculation Methodology

The Index calculation follows a rule-based methodology with no discretionary adjustments. The Index value is calculated daily by dividing the sum of revenues of all active assets (section 2.2.1) by the sum of their rated power or energy capacity (section 2.4.1). This gives a normalised measure of average revenue per unit of capacity.

daily index = Σ revenue of active assets ÷ Σ capacity of active assets

Working at daily grain means mid-month commissioning and the 1 October Capacity Year boundary are handled correctly.

2.4.1 Divisor

The divisor is calculated daily by summing the rated power (MW) or energy capacity (MWh) of all assets active on that day (section 2.2.1), with rated power based on nameplate capacity rather than grid-connection capacity. It is recalculated daily to reflect changes in asset availability.

2.5 Index Value Representation

The index value can be normalised on two independent axes:

Capacity: per MW (of rated power), per MWh (of energy capacity), or none.
Time: per year (annualised), per hour, or none.

For a period, the total index value is the sum of the daily index values. Per hour divides it by the number of hours in the period (days × 24); per year divides it by the number of days in the period and multiplies by 365.

Any combination is available — for example per MW per year (AUD/MW/year), per MWh per year, or per MW with no time normalisation (total AUD/MW over the period).

3. Revenue Components

3.1 Revenue Components of the Index

The index nets three revenue streams. FCESS is the WEM's frequency-control framework and replaces the concept of FCAS used in the NEM.

Stream	Services	Basis
Energy	Real-Time Market energy (dispatch and charging)	Dispatch-derived MWh × RTM price × TLF
FCESS	Regulation Raise, Regulation Lower, Contingency Reserve Raise, Contingency Reserve Lower, RoCoF Control	Dispatched MW × service price
RCM	Reserve Capacity Mechanism (Capacity Credits)	Capacity Credits × Reserve Capacity Price, amortised

3.2 Excluded Revenues

The following are excluded from the index calculation:

Tolling and floor arrangements.
Bilateral contracts (e.g. PPAs).
Non-Co-optimised Essential System Services (NCESS): a Schedule-5 network-control mechanism procured by AEMO and Western Power. It is excluded entirely — not included in the index or in reported revenues.

4. Data Sources and Methodology

4.1 Data Inputs and Visibility

Modo Energy includes only battery energy storage facilities identified in AEMO's WEM facility and dispatch data. Dispatch, price, and loss-factor inputs are sourced from AEMO's Western Australia data portal (data.wa.aemo.com.au), including the WEMDE dispatch solution and RTM prices. Optimiser and ownership context are sourced from public information or direct company confirmation.

4.2 Energy Throughput and Cycles

Energy volumes are calculated from the initial MW of each five-minute interval, as reported in AEMO's WEMDE dispatch solution. Power is averaged between consecutive intervals (a trapezoidal estimate) to produce an estimated energy volume over time.

Cycles are calculated as: daily export throughput ÷ rated energy storage capacity.

4.3 Revenue Calculation Methodology

A battery registered to both discharge and charge yields a single net revenue figure: revenue from discharge (export) and the cost of charging (import) are combined into one net value per interval.

4.3.1 Energy Market Revenue Calculation

Energy revenue is the estimated energy volume for the interval (section 4.2) multiplied by the interval's RTM energy price and by the facility's loss factor. Charging (import) energy is treated as negative, so it nets against discharge revenue.

energy_revenue = (export_mwh + import_mwh) × energy_price × TLF

(import_mwh is negative; TLF is the facility's transmission loss factor)

The Transmission Loss Factor (TLF) is set annually per financial year (1 July – 30 June) from AEMO's facility loss-factor data. It is applied to energy only; Distribution Loss Factors are not applied.

4.3.2 FCESS Revenue Calculation

FCESS revenue is calculated by multiplying the dispatched (cleared) quantity of each service, in MW, by the corresponding RTM price for that service, per five-minute interval. Loss factors are not applied to FCESS.

fcess_revenue = dispatched_mw × service_price ÷ 12

(÷12 converts a five-minute MW clearance to the interval's value; per service: regulation raise/lower, contingency reserve raise/lower, RoCoF control)

Contingency reserve revenue is grouped by direction (raise / lower) when reporting.

4.3.3 Reserve Capacity Mechanism (RCM) Revenue Calculation

RCM revenue is a capacity payment, not a dispatch outcome. A facility's annual capacity revenue — its assigned Capacity Credits multiplied by the applicable Reserve Capacity Price — is amortised evenly across every five-minute interval of the Capacity Year, so that it accrues at a constant rate rather than at any single dispatch instant.

rcm_revenue_per_interval = (capacity_credits × reserve_capacity_price) ÷ 365 ÷ 288

(288 five-minute intervals per day)

4.4 Updates and Revisions

The index is updated daily to reflect the most current data. Where additional or revised data becomes available after a trading day, calculations are backdated to include it.

Note on timing: WEM operates in Australian Western Standard Time (AWST, UTC+8, no daylight saving). Daily figures are calculated on AWST calendar days.

5. Governance and Compliance

5.1 Transparency

Detailed explanations of the calculation methodology and revenue components are provided to ensure transparency.

5.2 Stakeholder Engagement

Feedback from stakeholders is actively sought and incorporated into methodology updates. Reviews are conducted by a team of experts to maintain accuracy and relevance.

6. Methodology Changes

6.1 Review and Update Process

The methodology is periodically reviewed to ensure it remains current with market conditions and regulatory change. New products or services introduced into the WEM are assessed for inclusion.

6.2 Notification of Changes

Significant changes to the methodology are communicated to stakeholders in advance, with detailed explanations provided.

7. Consistency and Continuity

7.1 Quality Assurance

Rigorous quality-assurance processes ensure the accuracy and reliability of benchmark calculations, including regular audits and validation of data sources and calculation methods.

7.2 Data Integrity

Data integrity is maintained through strict data-management protocols, including secure storage, regular backups, and robust validation procedures.

7.3 Continuity Planning

Business-continuity planning ensures benchmark calculations can continue uninterrupted in the event of unexpected disruption, including backup systems and contingency plans.