07 Aug 2023
Charlie Hetherington

Battery energy storage: the numbers and trends behind July’s revenues

In July 2023, battery energy storage revenues in Great Britain bounced back (a little) from the lows of the previous couple of months. Modo’s monthly Revenue Benchmark was the highest it’s been since January - though still lower than at any point in 2022.

The Modo Revenue Benchmark for July was £5,892/MW - up 54% from June. Essentially, any batteries that earned more than this amount (the median revenue of all the assets on the Modo Leaderboard) did better than most across the month.

Shaniyaa dives into the numbers and trends behind July’s Revenue Benchmark.

So, what’s behind these numbers? Which markets proved the biggest earners for batteries in July? And what were the major trends or events that shaped last month’s battery energy storage revenues in Great Britain?

There’s now more than 2.9 GW of grid-scale battery energy storage in Great Britain

In July, three new grid-scale battery energy storage assets (>7 MW) came online in Great Britain - adding around 80 MW (and 100 MWh) of new battery capacity to the system.

Overall, this brings us to the brink of 3 GW - and means that battery energy storage capacity in Britain has grown by 1 GW in the past eight months. The previous 1 GW of capacity took two years to come online - so buildout speed is really ramping up!

Want to know more about the buildout pipeline of battery energy storage in Great Britain? Check out our latest quarterly update here!

Increased Dynamic Containment Low volumes led to the highest average prices since November

National Grid ESO procured its highest-ever volumes of Dynamic Containment in July.

  • The average requirement (per EFA block) in the high-frequency service was 1,226 MW - slightly higher than last month, but generally following the recent pattern of steady increases.
  • The average requirement in the low-frequency service was 1,245 MW. This was a massive, 53% jump from June - and was due, in large part, to frequency oscillations in Scotland.

As a result, prices in Dynamic Containment Low increased as well - they more than quadrupled, from £1.41/MW/h in June, to £6.41/MW/h in July. This was the highest average monthly price since November 2022.

Most of the high prices came in the first half of the month - Modo Plus and Enterprise users can check out our Deep Dive on the topic.

Dynamic Containment revenues for batteries were 80% higher in July than in June. And, overall, the service provided 66% of July’s battery energy storage revenues.

However, Dynamic Containment is still heavily saturated - and will likely remain so as more capacity enters the market

The service still only paid around 15% of the prices seen during the summer of 2022 - this is because Dynamic Containment is fully saturated.

Even with the increase in volume requirements, eligible capacity far outstrips the volume that National Grid ESO is looking to buy.

Negative prices in July created wholesale opportunities for batteries

On two separate weekends in July, lots of wind and solar energy coincided with lower demand - which produced record-breaking negative prices all over Europe.

In the EPEX hourly day-ahead market, we saw a record low price of £-75.70/MWh. This meant that batteries could be paid to charge.

We covered the response of Britain’s battery energy storage fleet to these record negative prices in this Deep Dive - available to Modo Plus and Enterprise users.

On the other weekend (15th and 16th July), the negative wholesale power prices saw batteries earn four times more than on days with ‘normal’ pricing - £20,567/MW vs. £5,336/MW (annualized).

Wholesale spreads were up 20% from June - and battery revenues from wholesale activities doubled.

Dispatch volumes in the Balancing Mechanism flattened - after four months of significant growth

After several months of growth in the volume of battery dispatches in the Balancing Mechanism, July actually saw a drop-off in Offer volumes. However, a 32% increase in Bid volumes meant that overall dispatch volumes rose to 14.9 GWh (2% higher than in June).

With increasing revenues elsewhere (as noted above), this meant the overall share of monthly battery revenues from the Balancing Mechanism fell to just 4% - down from 7% in June.

Want to know more about the Balancing Mechanism? You’re in luck...

We’ve recently published a number of articles looking specifically at Balancing Mechanism “skip rates”. Check them out below:

  • We calculated battery “skip rates” in the Balancing Mechanism to be 91%. Modo Plus and Enterprise users can check out the Deep Dive - and everyone else can read the Quick Take version.
  • We also looked at how battery skip rates compare to other technologies - and that piece is available for everyone. Read it here.
  • And, lastly, we looked into one of the reasons why batteries get skipped so often - there’s a 15-minute restriction on dispatch durations, which prevents batteries from competing for a whole lot of Balancing Mechanism volume.
  • That’s a two-parter: everyone can read Part One (which looks at why the 15-minute restriction exists), while Modo Plus and Enterprise users also have access to Part Two (which explores exactly how much volume batteries are missing out on).