On December 12th, batteries in Great Britain achieved their highest single-day revenues in two years, earning £204k/MW/year. This milestone came after they recorded their third-highest single-day revenues of the year on December 11th, as wholesale power prices spiked on two consecutive days.
December 11th and 12th were just the second and third times daily battery revenues exceeded £100k/MW/year since June 2023. In 2023, batteries saw their revenue boost primarily through frequency response services. However, in 2024, 60% of battery revenues were earned from wholesale markets. So, what caused the high prices, and how did they impact battery revenues?
High revenues were driven by high wholesale prices at peak demand
On December 11th, wholesale day-ahead prices spiked to £346/MWh. However, prices hit £496/MWh the following day at 4 p.m. This is the highest day-ahead price since December 2022.
Despite the high prices on December 11th, total revenues were still lower than those seen on October 14th. This is because intraday prices in October hit £670/MWh, and intraday trading is now included in the ME BESS GB Index.
The day-ahead market is a much larger market for batteries than the intraday - Batteries earn most of their revenue from day-ahead trading. This means total battery revenues were higher on December 12th than in October.
Low wind generation coincided with high peak demand
On December 11th, national demand reached its highest level since January 2024, exceeding 43 GW. Both December 11th and 12th were in the top 25 days for demand this year.
Actual demand was consistently higher than forecast demand on these days, meaning power margins were tighter than expected. This has been the case for much of December, however, on December 11th and 12th, wind generation reduced sharply. Both were in the lowest 25 days for wind generation in 2024.
Expensive peaking plants were required to switch on
The low wind meant expensive forms of generation were needed online. On December 11th and 12th, over 200 MW of Open-Cycle Gas turbines (OCGTs) were online in 56% of settlement periods. Throughout 2024, this level of OCGT generation has only been required in 2% of settlement periods.