Battery energy storage is an incredibly flexible technology and can be operated in any number of ways. The operation of a battery is mainly driven by how it can earn the most revenue and in which markets.
But what is the operational profile of battery energy storage in Great Britain? When should future systems be expected to charge and discharge? And how do individual systems deviate from this?
Firstly, what do we mean by ‘operational profile’?
By operational profile, we mean the shape of the physical output of a battery across the day. This may be scheduled output to trade energy or output in response to frequency deviations on the grid.
The fleet’s operational profile is the combination of physical outputs from each individual battery.
The wholesale market dominates the daily profile for asset operations
Battery energy storage systems in Great Britain tend to operate in three main markets. Frequency response, the Balancing Mechanism, and wholesale markets. When and how batteries export or import on any given day will be determined by which markets they participate in.
The fleet profile follows a shape many may expect from battery energy storage. The fleet charges up overnight and in the middle of the day and discharges in the morning and evening peaks. This shape broadly follows prices in the wholesale market - batteries charge when prices are lower and discharge when prices are higher.
Trading in the wholesale markets utilizes significantly higher proportions of power on average than frequency response services and Balancing Mechanism actions. Therefore it is the primary driver of the shape of the fleet’s operational profile.
There is significant day-to-day variation in how a battery operates
The actual output of the battery energy storage fleet on any given day can vary from this average profile. As a proportion of total fleet capacity, imports and exports at any given time can fall within a wide range.
- Overnight, batteries rarely discharge to any meaningful extent. The top 1% of exports overnight only reach 5% of total power.
- Likewise, in the evening peak, it is extremely rare for batteries to charge to any meaningful extent.
- The highest fleet exports reached only 40% of the total fleet capacity. This is because most battery capacity has historically been tied up in frequency response contracts.
Frequency response and Balancing Mechanism activity does not follow a daily shape
Whilst the fleet-wide operational profile follows a defined daily shape, this is driven by wholesale trading. The operational profile of battery storage for charging and discharging while delivery frequency response is much flatter.
Significant volatility can lie under this shape - it ends up flat because changes in frequency tend to be essentially random across the day. In the last week of July 2023, frequency response resulted in very different operational profiles each day.
Similarly, the Balancing Mechanism has no clear patterns regarding actions throughout the day. This is because Bids and Offers can be dispatched across any half-hour of the day, in response to system need at the time.
Markets determine individual asset operational profiles
The link between market and operational profile means that the outputs from individual batteries can vary significantly. Those focusing on trading will have a more distinctive, shaped profile. Meanwhile, battery energy storage systems focusing on a frequency response-focused strategy have a much flatter profile.
- Lower Road and Tynemouth have a relatively flat profile. Both have made much of their revenues in the past year from Firm Frequency Response and the dynamic suite.
- Creyke Beck, Holes Bay, Red Scar, and Mannington have generated large portions of their monthly revenues from the wholesale market. The impact of this is shown through their operational profiles.
Wholesale price is the primary driver for asset operations
The link between wholesale trading and battery output means wholesale prices are the strongest determinant of the battery fleet’s outputs. But this hasn’t always been the case.
For a lot of 2022, much of the battery fleet was focused on delivering frequency response, especially Dynamic Containment, with high prices on offer. This meant that the average fleet operational profile was much flatter during this period.
Since September 2022, the frequency response markets have started to saturate. This means uncontracted capacity has increasingly spilled over to trading in the wholesale market. Therefore the operational profile became much more distinct as providers look to the wholesale market for revenues, leading to the shape we see today.
The operational profile of the fleet changes its shape throughout the year
The shape and size of wholesale prices are affected by seasonal changes and daily changes from factors such as demand and weather conditions.
The half-hourly output of the fleet from August 2022 to July 2023 shows how the operational profile of the battery fleet transitions throughout the year due to seasonal changes.
- Battery exports across the evening demand peak are greatest in the winter months of December to March.
- The timing of the evening peak is primarily driven by light. This means peak evening prices and battery exports shift later in the day in spring and summer.
- Batteries charge up mostly overnight in the winter. But there is a big shift to charging in the early afternoon in the spring and summer, as solar generation brings cheaper prices to these hours.
Extreme days cause big deviations in fleet output
Within these seasonal changes, individual days can also deviate greatly from the operational profile following isolated price events.
On 12th December 2022, prices reached record-high levels across the evening peak. The battery energy storage fleet discharged heavily, reaching over 600 MW at 5 pm - still the highest levels we’ve seen. There was very little output in the morning.
In contrast, during record negative prices on 2nd July 2023, the fleet mostly charged during the middle of the day, then discharged much later when prices turned positive.
Meanwhile, Christmas Day in 2022 introduced a unique profile for asset operations. This is because the highest prices occurred around 1pm, when demand peaked. As a result, the battery fleet discharged at this time and imported in the evening,
The wholesale market will only grow in how it dominates the fleet operational profile
With frequency response services saturated, many providers increasingly look to wholesale trading to boost revenue. Therefore, this service will continue to dominate the operational profile of battery storage.
More and more battery capacity is coming online, but frequency response markets are not increasing by anywhere near the same amount. Therefore, the link between the fleet operational profile and wholesale prices is only expected to grow over time. With newer systems likely able to cycle more, we might also see the two-cycle shape grow even more pronounced over time.
Increasing trading in intraday markets may lead to deviations away from this shape, taking advantage of deviations between this and the day-ahead price. Meanwhile, increasing utilization in the Balancing Mechanism would see more imports and exports outside of common windows.
However, both are likely less significant compared to the growing link to the day-ahead wholesale market.
Download the data
The data used in this article can be downloaded as a csv file here.