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?
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.

This can be via an automated solution, human decision-making, or a combination of both. However, the 5-minutely bidding intervals in the NEM make the use of algorithmic “autobidders” common - whether built internally or provided by a third party.
By enacting different bidding strategies, optimisers aim to maximise the revenue of their battery or wider portfolio across the different markets.
Optimisation is not a defined responsibility within the NEM but fits under the role of “controller”
Every generator or battery registered in the NEM has three defined responsibilities: the owner, controller, and operator. A single party can provide all three responsibilities, but these responsibilities can also be split.

Each role must ultimately be provided by a “registered party” in the NEM. This can be directly, or through the nomination of a registered party to act as an intermediary. These nominations can go both ways:
- An owner can nominate a different party to fulfil this role. This party takes on financial responsibility for the asset - this is what happens for physical tolls.
- A third-party optimiser/operator can nominate a registered party (such as the asset owner) to act as an intermediary. This allows third-party providers to provide bidding services.
Each asset can only have one owner (with this the only information made publicly available). However, multiple parties can be nominated as controller and/or operator. For example, a trading desk may work with a third-party autobidder to create and submit bids.
In this case both these parties work together as optimiser - and this means that optimisation can mean different things for different batteries in the NEM.
How optimisation interacts with tolls depends on the contract type
Tolls have played, and continue to play, an important role in getting battery energy storage built in the NEM. This was historically through ‘physical’ tolls, but increasingly now through ‘virtual’ tolls. These change the role of an optimiser.
- Physical toll - The company providing the toll takes complete ownership of the system. It registers the system with AEMO, and takes all operational and optimisation decisions. This means it acts as the optimiser (unless then appointing a third party).
- Virtual toll - The company providing the toll can send charge or discharge requests to the asset, but the owner registers the system, and has responsibility for bidding. They may then nominate a third-party optimiser to control this bidding.
BESS owners, toll providers, and specialist third-parties split optimisation in the NEM
The majority (1.3 GW) of battery energy storage commercially operational today is optimised by companies that either own or have contracted the system under a long-term physical toll. These act as the main registered party for each asset.
Third-party optimisation providers have full or partial control of a combined 845 MW. These systems are registered under the asset owner or holding trust, and sometimes have shared optimisation control.
AGL has the largest portfolio under their control, with a total of 631 MW including virtual tolls. The two third-party optimisation providers, Tesla via their Autobidder platform and Fluence with their Mosaic bidding software, have 588 MW and 257 MW respectively.
The table below contains optimisation details for each battery energy storage system commercially operational in the NEM.
Competition in the optimisation space could heat up
To date, third-party optimisation for scheduled batteries in the NEM has not been a particularly competitive market - in contrast to markets such as Great Britain. There is only a single party (Fluence) that has provided optimisation services in the NEM for systems that they didn’t also supply.
In part, this reflects the role that large utilities have played in the batteries that exist today, either by owning outright or tolling them, as well as the role Tesla has played with its Autobidder platform.
However, as battery energy storage buildout ramps up, this could change. An increase in the number of systems being built outside of these structures should increase the demand for third-party optimisation services. This in turn could see competition increase. For example, Eku Energy has contracted provider Habitat Energy to provide optimisation services at the 250 MW Williamsdale BESS.
We want to make a list of third-party BESS optimisers in the NEM. If you offer optimisation/bidding services (either merchant or via a toll) and want to be included just send across a brief description of your business and a main point of contact to team@modo.energy.
Additionally, if you offer third-party operation services for BESS we’re keen to know - please get in touch with the same.