The utilization of battery energy storage in the Balancing Mechanism has improved in 2024, but the technology still suffers from “skips”. Battery skip rates remain high for constraint actions especially - the subject of a recent article in the Financial Times. This means different batteries currently face different impacts of skips based on where they are located.
Overall battery skip rates have improved since the end of 2023 - falling from above 90% to 76% in August.
A skip is when a more expensive action is taken instead of an available, cheaper battery action. This can happen for a number of reasons, including technical limitations in the control room. The skip rate is a measure of how frequently this occurs.
We calculate the skip rate as the percentage of settlement periods in which a battery is available at a price cheaper than the most expensive action but not dispatched. This is calculated on both a per-battery basis and across the entire fleet.
The improvement in skip rates in 2024 mainly follows two actions taken by the ESO:
- The launch of the Open Balancing Platform (OBP) and, subsequently, Bulk Dispatch for batteries in January 2024. This significantly improved how the control room can dispatch batteries.
- The change to the 30-minute rule in March, which allowed batteries to be dispatched for longer. This means batteries can compete for a wider array of dispatches.
The reduction in skip rates has led to a record amount of battery dispatch volume
Accompanying the fall in skip rates have been increases in the overall amount of energy dispatched to batteries. A record 2.5 GWh per day of energy was dispatched to batteries in August—2.5x the figure from December.
This has improved the “in-merit dispatch rate” of battery energy storage, which measures how much of the energy made available by batteries at a competitive price is dispatched.
This is our preferred method for tracking the dispatch efficiency of batteries in the Balancing Mechanism. It looks at the amount of energy dispatched, not just the number of settlement periods, which makes it more appropriate for determining the impact on the actual value batteries are receiving from the Balancing Mechanism. An update is published every month within our regular benchmark updates.
Skip rates for system-flagged actions are worse than energy actions
Actions taken in the Balancing Mechanism are split between “energy” and “system” actions. System actions are flagged by the control room when they meet certain criteria, mostly around actions taken to solve constraints on the network. Energy actions encompass everything not flagged.
The skip rate for both sets of actions has improved in 2024—however, much more so for energy actions. In December, system actions experienced a skip rate of 97%, which had improved to 91% in August. For energy actions, the skip rate has improved from 92% in December to 73% in August.
Constraint actions are not currently dispatched via the Open Balancing Platform, and therefore, these actions are not instructed via Bulk Dispatch. Instead, these actions still rely on legacy, manual processes for dispatch.
The improvement in skip rates for system actions has had an impact—the number of system-flagged actions dispatched to batteries has grown in 2024. However, these still form only 6% of total battery dispatches. This is despite system-flagged actions making up over 50% of total Balancing Mechanism dispatch volume.
But this means batteries in the North of Scotland face the highest skip rates
Energy and system actions are not equally distributed across regions in Great Britain. System actions resolve constraints, and the majority of these occur in Scotland. These constraints also prevent batteries in these regions from receiving the same number of Offer dispatches as other regions.
This means batteries in North Scotland are extremely reliant upon system-flagged Bid actions for generating value from the Balancing Mechanism.