ESO relaunched bulk dispatch for battery energy storage units in the Balancing Mechanism on 8th January 2024. In the eight weeks since, there has been a 47% increase in weekly dispatched volume compared to eight weeks before.
- The increase comes from both system-flagged and energy actions and was mostly led by an increase in offer volume, which rose by 54%.
- Around 50% of battery unit dispatch volume is being instructed through the Open Balancing Platform (OBP), based on ESO data.
But what does this look like on an individual, battery-by-battery basis?
- 86% of individual battery units have experienced an increase in dispatch volume. The remaining 14% has seen a reduction since the relaunch of bulk dispatch.
- Dispatch rates are now more influenced by price and less so by unit size. More competitively priced assets are seeing higher dispatch rates.
- Units in Scotland are also seeing higher levels of system-flagged actions as part of ESO’s overall strategy to enhance the utilization of storage units in the Balancing Mechanism.
86% of units saw an increase in dispatch volume following the relaunch of bulk dispatch
There was an increase in the amount of volume almost all units were dispatched for each week. On average, before bulk dispatch batteries were dispatched at 2.2 MWh/MW of the unit’s rated power. Following bulk dispatch, batteries are dispatched at 3.6 MWh/MW.
Users with a Benchmarking Pro GB subscription can download the data behind this article below.
This is an average increase of 1.4 MWh/MW for each unit. Of these, Hill Farm has seen the biggest increase at 8.4 MWh/MW, leading to weekly dispatched volume three times what it was before. Creyke Beck has seen the biggest decrease of the remaining registered units, at 2.7 MWh/MW.
Batteries in Scotland see an uplift in system-flagged dispatch volume
While most of the increase has come from Offers for energy actions, some units have seen an increase in system-flagged Bid dispatches.
Units in Scotland, and the Red Scar battery based in the North West of England, are the only battery units typically receiving system-flagged actions. This is because units in Scotland are based in a supply-constrained region. These units have seen a 3% increase in dispatch volume for Bids.
System-flagged actions are not dispatched via the Open Balancing Platform. However ESO is working to enhance the utilization of storage units in the Balancing Mechanism overall.
So what is leading to the increase in dispatch volumes overall?
All units have seen an increase in the number of instructions received each week
On average units are receiving five times as many individual instructions since the relaunch of bulk dispatch than before.
- Enderby has seen the greatest increase in average weekly dispatches at 198 additional dispatches a week
- Despite receiving 1.7 MWh/MW less in dispatch volume per week, Dollymans is receiving 99 more instructions a week.
While all batteries are receiving more dispatches, these dispatches have reduced in size.
All units have seen a reduction in the size of their Bid/Offer Acceptances (BOAs) since bulk dispatch
Following bulk dispatch all units have seen a reduced average volume required per instruction. However, this means that batteries are being dispatched more uniformly when taken in proportion to the unit size.
This means that, in general, units that were seeing smaller volumes per instruction have had the smallest decrease in instruction size. While units that were receiving the largest instructions have seen the biggest reductions.
In the eight weeks before the relaunch the difference between the smallest and largest instructions on average was 0.4 MWh/MW, whereas it is now 0.1 MWh/MW.
Dollymans saw the biggest reduction in terms of total energy at 14 MWh less per instruction but per MW of capacity, there are several units that have had greater reductions.
Jamesfield Farm 1 which began operations in December 2023, has seen the biggest reduction in instruction size per MW at 0.3 MWh/MW.
Bulk dispatch has made it easier for smaller units to be dispatched.
Dispatch rate has increased for smaller units
Previously, units with a higher rated power had a higher dispatch rate. This is because, before the bulk dispatch function, these units were easier for the control room to dispatch within the timeframes required.
However, since the relaunch of bulk dispatch for batteries, there is no correlation between unit size and dispatch rate.
- Batteries under 50 MW saw over twice the in-merit dispatch rate from the eight weeks prior to bulk dispatch relaunch.
- The 100 MW Dollymans is the only BMU with over 50 MW of capacity and it has seen a 17% reduction in in-merit dispatch rate.
Now that the size of a unit does not determine how easy it is to dispatch, price has a greater impact on dispatch rates.
Batteries priced more competitively are getting higher dispatch rates with bulk dispatch
Due to limitations in the control room prior to bulk dispatch, there was less correlation between batteries that were priced more competitively and dispatch rates. Here, dispatch rate is the ratio of actioned volume to all available volume, whether it was ‘in-merit’ or not. However, since the relaunch of bulk dispatch, dispatch rates are highly correlated to price.
Units priced cheaper are dispatched for a higher proportion of their available capacity. Between the different operators, Arenko is seeing the highest dispatch rates and has been pricing its units more competitively. On the other hand, Flexitricity and Statkraft are typically priced more expensive and, therefore, have a lower dispatch rate.
Different operating strategies mean there is no direct link between dispatch rate and overall revenues
Most battery units will operate a strategy combining wholesale trading, frequency response and Balancing Mechanism delivery. Therefore the impact of dispatch rate on revenues should consider the combined revenues from all services.
Despite the increase in dispatch rate across battery units since the relaunch of bulk dispatch, there is no correlation between dispatch rate (whether in-merit or not) and total daily revenues.
Now that price is having a bigger impact on dispatch rate, in order to increase dispatched volume, batteries will have to be priced cheaper compared to each other and other technologies.
While reducing price could lead to more dispatches this could impact the spread from importing and exporting within the Balancing Mechanism and other markets.
The introduction of the 30-minute rule should allow batteries to compete for a larger amount of volume in the Balancing Mechanism. This is because 69% of Balancing Mechanism volume is from 30-minute actions. This means competing with CCGTs which historically have been priced cheaper than batteries.
Since the beginning of the year, batteries have been accepted at a price 8% lower than the average accepted price in the settlement period for Bids (this would be a more expensive action). While CCGTs were accepted at a price 5% higher, this would be a less expensive action. For offers, CCGTs and batteries are both accepted at a price around the average market price.
The in-merit dispatch rate for batteries has doubled
In summary, the data suggests that bulk dispatch is increasing the dispatch rates for batteries on an individual basis. As well as seeing an increase in proportion to the unit’s size, batteries have also seen an increase in proportion to their available in-merit volume. The in-merit dispatch rate doubled from 3% on average between November 13th 2023 - January 7th 2024, to 6% from January 8th 2024 to March 3rd 2024.
As batteries begin to access more of the Balancing Mechanism, there is potential for the in-merit dispatch rate to increase. Especially for longer-duration assets. Over the next few months, we will begin to see the extent of the effectiveness of control room updates such as bulk dispatch, technical parameters such as the 30-minute rule, and new markets such as Balancing Reserve. And the overall impact of these on operational strategies and battery revenues.