How much did battery energy storage systems earn last month?
The Modo Benchmark for May was £3,722/MW.
This is the median revenue of battery energy storage assets in our Leaderboard. As such, any assets that earned more than this in May were more successful than average.
Overall revenues hit their lowest monthly levels since Modo started tracking the data - in January 2020.
So, what’s been happening in the market to get us to these numbers? Here are the top five things you need to know from May:
1. Battery energy storage buildout is really ramping up
In May, Great Britain’s grid-scale battery energy storage capacity surpassed 2.5 GW.
- Overall battery energy storage capacity in Great Britain has now reached 2,664 MW - and deployment is speeding up.
- Already this year, 581.5 MW of new capacity has entered the market - at a rate of 116 MW per month.
- This is more than double last year’s rate - we saw an average of 56 MW per month across 2022.
In May, six new large (>5 MW) assets - totaling 168.5 MW of capacity - entered the market.
2. Dynamic Containment is more saturated than ever
With all that new capacity, Dynamic Containment is more saturated than ever.
The amount of battery capacity eligible to provide high-frequency Dynamic Containment (2,229 MW) is now more than double the amount National Grid ESO needs (an average of 1,099 MW in May - the most ever procured).
This meant the service cleared at an average of £3.95/MW/h - the first price drop in three months, despite a backdrop of increased requirements.
- Even with falling prices, high-frequency Dynamic Containment was still responsible for 43% of battery energy storage revenues in May.
- For the eleventh month in a row, low-frequency Dynamic Containment prices fell. In May 2023, the service cleared at an average of £1.37/MW/h - the lowest price since the service launched in October 2020.
3. Monthly Firm Frequency Response prices hit new lows
In Firm Frequency Response, prices fell for the eighth consecutive month.
- May’s reference price of £5.69/MW/hour was the lowest since we've been monitoring prices.
- This beats the previous low - £5.76/MW/hour in April 2021.
The Firm Frequency Response auction takes place a month ahead of delivery. As such, when entering the auction, operators have to weigh up the likelihood of getting a better price elsewhere - and price their bids accordingly.
At times in recent months, the prices available in FFR have far surpassed amounts being made in other markets - but this is leveling out.
Saturation has pushed prices down - but that closing of the gap between FFR prices and those available in other markets shows that, in general, operators are getting better at anticipating revenue opportunities elsewhere.
4. May’s wholesale spreads were the lowest of 2023 (so far)
The average daily wholesale spread available in May 2023 was £42.05/MWh - down 25% from April (£55.72/MWh). May had the lowest average monthly spreads of this year so far.
So, how much could a battery have made trading day-ahead in May?
- A one-hour system, trading with perfect forecasting on EPEX SPOT’s day-ahead auction, would’ve made £828/MW in May.
- A two-hour system (doing the same) would’ve made £1,565/MW.
5. More battery energy storage was dispatched in the Balancing Mechanism than ever before
Following saturation in frequency response services, batteries are now more available than ever to turn up (Offer) in the Balancing Mechanism.
This increased availability led to battery energy storage dispatching 6.4 GWh of Offers in May - an all-time high. This meant a 17% increase from April - the previous record. Increasingly, batteries are being called upon in the Balancing Mechanism.
And, with prices low elsewhere, this meant that revenues from the Balancing Mechanism made up a bigger proportion of the monthly total than ever before.
Want to find out more? Head to the Leaderboard to find out which assets made the most money in May.