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01 Sep 2022
Imrith Sangha

August 2022 Leaderboard : what Asset Success looked like

To go alongside the publication of our August 2022 Leaderboard, Alex and Imrith discuss battery energy storage system (BESS) trends and strategies from the last month. In the video below, you’ll be able to dive deeper into August revenues on an asset-by-asset basis.

Imrith and Alex discuss the August 2022 Leaderboard.

Leaderboard analysis

Fleet revenues

Figure 1 (below) shows the average fleet revenues for BESS assets in Great Britain (GB), from January 2020 to August 2022 (inclusive).

Average GB fleet revenues (Jan 20 - Aug 22)

In August 2022, average earnings (£/MW) for BESS assets decreased by 26.01% from the previous month - to an annualised revenue of £166,227/MW.

Asset revenues

Figure 2 (below) shows the revenues of assets on the Modo Leaderboard in August 2022 (excluding Capacity Market contracts).

Leaderboard asset revenues (Aug 22)

Asset strategies can be split into three categories:

  • Strictly participating in Firm Frequency Response (FFR).
  • Strictly participating in Dynamic frequency response services.
  • Participating in both Dynamic frequency response services and FFR.

Figure 3 (below) shows asset revenues for the different operational strategies taken in August 2022.

Note: Asset strategies refer to the dominant frequency response service participated in by an asset. The Balancing Mechanism (BM) and wholesale markets are included in these asset revenues.

Figure 3 - Modo Leaderboard asset revenues categorised by operational strategy (August 2022).
  • The average revenue for assets that strictly provided Dynamic Frequency Response services was £14,354/MW, 37.76% lower than in July 2022.
  • The average revenue for the six BESS assets solely providing FFR was £12,243/MW - the lowest of all four operational strategies.
  • The higher accepted bid prices in FFR this month meant that solely providing FFR was on average 19.5% more lucrative than in July.

Operational spotlights

Wickham Market

Figure 4 (below) highlights the operation profile of Wickham Market on 22 August 2022.

Note: Wickham Market is a 50 MW / 74 MWh, BESS asset located in Suffolk. It’s owned by Gresham House, and operated by EDF.

Wickham Market operational profile (22 Aug 2022)

  • The asset takes arbitrage positions across two revenue sources, utilising both the BM and wholesale markets.
  • In EFA blocks 1-2, the asset imported 52.5 MWh. Charing up whilst system demand is lowest, at an average price of £389.61/MWh.
  • During the evening peak (in EFA block 6), the asset is accepted to dispatch 42.75 MWh in the BM at an acceptance price of £590.14/MWh, just before exporting its remaining charge in wholesale markets.
  • At the end of EFA block 6 (settlement periods 42 - 46), the asset imports (25.5 MWh) and exports (22.5 MWh) in wholesale markets, trading and managing its State-of-Energy (SoE) before providing high-frequency Dynamic Regulation (DRH) in EFA block 1 for the following day.

Figure 5 (below) highlights the revenue operation of Wickham Market on this day. (You can view this in more detail on our asset operation pages here.)

Figure 5 - Wickham Market revenue operation (22 August 2022).

Burwell

Figure 6 (below) shows the operation profile of Burwell on 11 August 2022.

Note: Burwell is a 50 MW / 50 MWh, BESS asset located outside Cambridge. It’s owned and operated by SMS.

Burwell operational profile (11 Aug 2022)

  • Like Wickham Market, Burwell pursued a heavily merchant-focused strategy (on this particular day), taking arbitrage positions and utilising both the BM and wholesale markets.
  • The green blocks show the volumes Burwell sold and bought in wholesale markets, highlighting the asset taking advantage of the expected high prices during the morning pickup and evening peak.
  • In EFA block 6, Burwell was turned down (or bid down) in the Balancing Mechanism (the yellow blocks). This means it bought back the energy it had otherwise planned to discharge during EFA 6.
  • This meant that the asset only exported 25.9 MWh over nine settlement periods in EFA block 6. During this period, Burwell’s estimated revenues were £365/MWh.

Figure 7 (below) highlights the revenue operation of Burwell on this day. (You can view this in more detail on our asset operation pages here.)

Figure 7 - Burwell revenue operation (11 August 2022).

What did success look like in August 2022?

The Modo benchmark for August 2022 was £12,670/MW for the month. Those assets making a higher return than this could be considered more successful than the average.

Unlike June and July, the most successful assets - those generating the highest revenues - were not those that largely provided only DC. This is because the volumes procured and the average clearing prices in the service were lower when compared to June and July 2022 (read more here).

The most successful assets were those able to take advantage of the lucrative opportunities available in merchant markets alongside providing frequency response services. This was largely done by assets either taking arbitrage positions in merchant markets or using the high import power associated with providing asymmetric DRH, and cost-recovery of this energy via Applicable Balancing Services Volume Data (ABSVD) payments, to essentially get paid to charge up whilst exporting power for revenue.

August has been the fourth most lucrative month ever for battery assets in GB, despite revenues falling 38.30% from the all-time highs in June 2022. It’ll be interesting to see how revenues evolve as merchant markets begin to play a larger role as we move into the winter.