In January 2025, Queensland battery revenues were three times the NEM average. This was primarily due to an extreme price event on 22 January that resulted in Queensland batteries earning 57% of their revenue for the month on that day alone.
However, batteries in Queensland earned different revenues on that day. Bouldercombe earned $18,466/MW, 38% higher than the state average of $13,363/MW. It also earned 61% higher revenues than Western Downs, even though both were two-hour batteries.
Queensland battery revenues varied so much because of their different bidding strategies. This article takes a closer look at how those strategies affect dispatch targets and, ultimately, battery earnings.
In this article, we refer to the Modo Energy NEM battery index, which represents the average revenues (inclusive of marginal loss factors) earned by batteries within the NEM across a period of time. The average is weighted and normalised by a battery’s rated power. All currency figures quoted are in Australian dollars (AUD).
The index and this article cover merchant revenues, defined as revenues from the NEM’s publicly traded wholesale energy and FCAS markets. Batteries may have other revenue sources, such as government contracts and power purchasing agreements.
Extremely high prices on 22 January 2025 drove Queensland battery revenues for the month
On 22nd January 2025, Queensland electricity demand was at all-time highs due to very high temperatures, especially in Brisbane. Energy prices in the state went over $10k/MWh from 18:00 to 19:35. This was an excellent opportunity for batteries to earn revenues from energy arbitrage.
However, batteries discharged differently during that period, leading to varying revenues. Bouldercombe had a net revenue of $18,445/MW for the day. Chinchilla and Western Downs had a net revenue of $14,972/MW and $11,432/MW, respectively. They were all two-hour batteries in Queensland, meaning they would have received similar revenues if they had bid perfectly.
Wandoan South, a 1.5-hour battery, also had similar revenue at $13,011/MW. Although its duration is shorter, Wandoan South would have also earned similar revenue with perfect bidding since the period was only 1.5 hours long.
Bouldercombe was dispatching at nearly full power
The different battery revenues were due to different dispatch profiles. The chart below shows the actual and target dispatch through the extreme price period. It also shows in-merit energy bids and regulation FCAS provision, which affect dispatch.
- Bouldercombe’s dispatch target was at maximum power (50 MW) for most of the period. In some intervals where the target was lower than 50 MW, it generated energy above the dispatch target for Raise Regulation FCAS.
- Western Downs’s dispatch targets changed throughout the period, driven by how much its energy bids were in merit. Western Downs did not discharge at full capacity at any interval in the period.
- Wandoan South did not receive energy dispatch targets at its full power, but provided Raise Regulation FCAS through the period. As a result, its actual dispatch was consistently above the energy dispatch target, enabling it to earn additional revenue.
- Chinchilla stopped discharging at 19:10 even though it still had 34Â MWh of charge and prices were over $10,000/MWh until 19:35, meaning it did not collect as much energy arbitrage revenues as possible.
Bidding out of merit meant batteries did not generate at full power during extremely high prices
The different dispatch profiles were, in turn, because the batteries had different bidding behaviours, leading to different amounts of energy market bids in merit. The chart below shows how much each battery bid into their different bid bands. Out-of-merit energy bids led to lower battery revenues than theoretically possible, as some batteries did not discharge at full power.
- Bouldercombe constantly bid all of its power (50 MW) at $9,523/MWh or below, so all its energy market bids were in merit.
- Western Downs bid some of its energy above $16,000/MWh, out of merit.
- Wandoan South bid 40-60Â MW of its power a few hundred dollars above the regional clearing price for most of the interval, so some of its power was always out of merit, and it did not discharge as much as it could.
- Chinchilla bid all of its power in merit from 18:00 to 19:00. But from 19:05 onwards, the battery changed to bid its energy at $14,971/MWh and above. The regional reference price was $14,319/MWh at 19:05 and did not exceed that for the rest of the evening, meaning that all of their energy bids were out of merit. Accordingly, the battery stopped discharging even though it still had charge.
Notably, all these batteries had different optimisers. Bouldercombe’s trading decisions are made by Tesla, Western Downs by Neoen/AGL, Wandoan South by AGL, and Chinchilla by CS Energy. AGL and CS Energy both own diverse generation portfolios, introducing another potential factor affecting how they trade their generation assets. A battery that is part of a larger portfolio may trade in a way that does not maximise battery revenues to maximise the collective revenue of the whole portfolio.