01 Dec 2022
Imrith Sangha

November 2022 Leaderboard: what Asset Success looked like

There have been many changes this month - including changes to our methodology and how you can interpret the Leaderboard in the platform. Check out our latest product release article here to stay in the loop. You can now directly compare the portfolios of battery energy storage owners and operators.

What did battery energy storage Asset Success look like in November 2022? To go alongside the publication of our November 2022 Leaderboard, Alex and Imrith discuss trends and strategies from the last month. In the video below, you can dive into November revenues on an asset-by-asset basis.

Alex and Imrith discuss the November 2022 Leaderboard.

Leaderboard analysis

Fleet revenues

Figure 1 (below) shows the average monthly revenues for battery energy storage assets in Great Britain (GB) - from January 2020 to November 2022 (inclusive).

Fleet revenues continue to fall

In November 2022, average earnings (£/MW) fell 7.71% from the previous month - to an annualized revenue of £102,436/MW.

Asset revenues

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

FFR leads the way on the November Leaderboard

Asset strategies can be split into three categories:

  • Those strictly participating in Firm Frequency Response.
  • Those strictly participating in Dynamic frequency response services.
  • And those participating in both Dynamic frequency response services and Firm Frequency Response.

Figure 3 (below) shows the November revenues of assets based on these operational strategies.

Note: Asset strategies refer to the dominant frequency response service an asset participated in. Balancing Mechanism and wholesale market revenues are still included in these numbers.

Figure 3 - Modo Leaderboard asset revenues categorized by operational strategy (November 2022).
  • The average revenue for assets strictly providing Dynamic frequency response services was £7,438/MW. This was down from £9,664/MW last month.
  • The most lucrative strategy in October was solely providing Firm Frequency Response. The average monthly revenue for the eight assets that pursued this strategy was £15,224/MW.

Operational highlights

Firm Frequency Response leads the way ... once again

Figure 4 (below) shows which single Leaderboard asset made the most money on each day of November 2022.

The 29th was the most lucrative day for one asset

  • On 25 of the 30 days in October, the asset that earned the highest revenue strictly provided Firm Frequency Response - up four days from last month, where this was the most lucrative strategy 21 of the 31 days in September.
  • The recent high price spikes in power markets coupled with high-frequency Dynamic Regulation clearing at a peak of £115/MW/h meant the 28th and 29th of November were the most lucrative days of the month.

Case study: Fleet operation (28th and 29th November 2022)

Huge price spikes led to extremely lucrative spreads - in excess of £850/MWh - on 28th and 29th November 2022. (You can read more about market conditions that shaped the November Leaderboard here.) This provided a lucrative opportunity for assets that were not contracted to provide monthly Firm Frequency Response.

Figure 5 (below) highlights the operational profile of all BMU-registered Leaderboard assets (1139 MW) on both days.

Figure 5 - BESS fleet operation (November 28 & 29 2022)
  • On 28th November, 549.8 MWh of energy was dispatched over the evening peak, with power prices in day-ahead markets reaching £925/MWh.
  • Opportunities in wholesale markets led to a spike low-frequency Dynamic Containment clearing prices. During EFA 5 on this day, the service cleared at £105/MW/h - with 376 MW of all BM-registered assets contracted to provide the service.
  • On 29th November, opportunities in wholesale markets were even greater, with evening peak prices of £1,136/MWh. On this day, low-frequency Dynamic Containment participation fell to 182 MW - with 645 MWh being dispatched by BMUs.

What did success look like in November 2022?

The Revenue Benchmark for battery energy storage assets in November 2022 was £8,809/MW for the month. Assets making a higher return than this were more successful than the average.

The most successful assets - those generating the highest revenues - were not those that largely provided Dynamic Containment. This is because average clearing prices in the service dropped to all-time lows (read more here).

From July to September 2022, the most successful assets were those using high-frequency Dynamic Regulation as a cost-effective way to charge up - while dispatching in wholesale markets. This remains a lucrative strategy - however, it comes at the cost of high cycling. This strategy has mostly been utilized by two-hour duration assets on the Leaderboard (Mannington, Hawkers Hill, and Contego).

Participation in low-frequency Dynamic Regulation has also picked up, with non-BMU assets exposing themselves to system price for cashout as a way to recoup the cost charing up to provide the service and avoid the volatility of Dynamic Containment.

Because of all of this, assets accepted into Firm Frequency Response were (on average) more successful. They secured consistent availability fees throughout the month, without exposing themselves to the volatility and saturation in Dynamic frequency response markets.