In December, battery energy storage revenues in Great Britain reached their highest level since January 2023. Revenues increased from November by 65% to £84k/MW/year, the highest monthly increase in four years. The high revenues were primarily caused by high wholesale prices and record levels of Balancing Mechanism dispatches.
Battery revenues in December doubled from January 2024
In early 2024, battery energy storage revenues reached their all-time low, averaging £36k/MW/year. In the final month of 2024, revenues reached their highest level in two years, more than doubling from January.
Revenues increased in every income stream except imbalance. The most significant increase came from frequency response, where revenues more than doubled due to a 94% increase in frequency response clearing prices.
The new Quick Reserve service went live on December 3rd. As a result, total reserve revenues increased to their highest-ever level, five times higher than their previous record set in March 2024 when Balancing Reserve launched.
Balancing Mechanism revenues also reached an all-time high, as a record 141 GWh of battery energy storage was dispatched across December.
The high revenues across all markets were largely driven by increased wholesale price spreads, which were up 32% in December. This came as wholesale prices hit their highest levels in two years.
Various factors, including wind generation, gas and carbon prices, and in-merit dispatch rates drive battery revenues. December saw an increase across most of these macro factors, including a 71% increase in dispatched Balancing Mechanism Offers.
Day-ahead wholesale price spreads increase by 32%, increasing revenues
Wholesale price spreads are still the main driver of battery revenues. In December, spreads increased to £96/MWh on average, their highest level since January 2023. On December 11th and 12th, price spreads reached back-to-back highs of £260/MWh and £409/MWh, respectively, increasing the monthly average. This contributed to the £4k/MW/year increase in wholesale revenues.