Battery energy storage optimisation in the National Electricity Market (NEM) is all about making smart bidding decisions to maximise revenues. But this can look very different for different systems. So, what actually is optimisation in the NEM, who is providing this today, and how does this fit with other responsibilities required for big batteries?
Executive Summary
- In the NEM, battery optimisation is all about adjusting bidding strategies to maximise revenues within market and system constraints.
- Each system has a single Financially Responsible Market Participant (FRMP) who manages the system. However, they can contract services such as optimisation to third-parties.
- Most battery capacity is optimised by owners or toll providers, but third-party services from Tesla and Fluence now contribute to bidding at over 800 MW of BESS.
- As more merchant-focused projects come online, competition among third-party optimisation providers is expected to grow.
Note: Information on optimisation and bidding providers isn’t always made public. We’ve analysed NEM bid data to group assets by similar bidding profiles and assign them to a specific optimiser, or combination of optimisers, and the data provided reflects our best understanding of responsibilities at each asset.
Optimisation of BESS in the NEM is all about bidding
Optimisation is essentially the making of decisions about how best to dispatch a battery energy storage system to maximise returns on a short and long-term basis, whilst adhering to the physical constraints of the system, such as state of charge, efficiency, and cycling.
Because the NEM is centrally dispatched, optimisers don’t physically dispatch an asset or trade energy. Instead they make decisions around bidding - price and availability - across the different markets available to batteries.