​In the National Electricity Market, a generator and battery sharing a grid connection can share one Marginal Loss Factor (MLF), or each can get its own, if the metering and registration support it.

From a revenue perspective, sharing an MLF usually reduces the project’s total revenue, depending on location. AEMO weights MLFs by energy volume (MWh), not price. Solar MLFs tend to be lower than battery MLFs. The shared MLF therefore lowers the battery’s evening exports, when prices are highest. They raise it on solar’s midday output, but this is when prices are lowest. The same shift is worth more in the evening, so the site loses revenue.

However, separate MLFs aren’t free. A battery gets its own MLF only if it has its own transmission node identifier (TNI). Adequate metering, a separate connection agreement, and more testing are required to keep TNIs, and therefore MLFs, separate. But this is costly.

Greenfield hybrids generally share a TNI/MLF. For shared-inverter (DC-coupled) hybrids, the ability to split is uncertain since separate metering is yet to be proven. Batteries added later in retrofits, usually with their own owner or offtaker, have split.

Executive summary

• Each TNI has one MLF (or one import/export pair), shared by every owner and meter behind it. A battery gets its own MLF if it has its own TNI, which for hybrids has been justified only where separate market participants or distinct retrofits exist.
• MLFs are weighted by energy, not price, so a shared MLF takes more revenue off the battery's high-priced exports than it adds to the solar farm's low-priced output.
• Exposure to the shared MLF drag is largest for a big battery at a weak solar node, where a lower solar MLF drags the shared MLF down.
• Most hybrids built today under one registered participant share an MLF. New ones likely will also, unless the battery is tolled to, or owned by, a separate party.
• DC-coupled hybrids are the most locked in. A second TNI/MLF needs a second DUID and distinct metering, approved by AEMO, which DC-coupling is still establishing.

Shared MLFs impact the battery more, because it exports at higher prices

As Modo's MLF explainer describes, AEMO weights MLFs by energy volume into one annual MLF per TNI. Batteries usually have higher MLFs than renewables, so sharing tends to lift renewables and cut the battery’s revenues. Because batteries export at higher prices, their loss can outweigh the generator's gain.

Further, if a sole offtaker is contracted to each asset, one will feel a greater change without the other technology offsetting it.

The impact on a project depends on how much its price profile deviates from its MLF volume-weighted profile.

In the illustrative model below, based on AEMO’s hypothetical loss curve above, a 100 MW solar farm with a 100 MW / 400 MWh battery earns 1.7% less under a shared factor, with identical dispatch.

These estimates hold dispatch fixed. In practice, the MLF structure also changes how a site would operate. Separate MLFs that favour the BESS would increase BESS cycling, while a shift that lifts solar but penalises the BESS would push dispatch in the other direction. These figures do not capture this effect.

Battery size, location and prices determine the exposure

The exposure is largest for a big battery at a weak solar node, where a lower solar MLF drags the shared MLF down. The higher the price that BESS dispatches into relative to solar (i.e. the greater the spread), the more the MLF will affect BESS earnings. A bigger battery moves the shared factor towards its own MLF, but also exposes more revenue to the factor.

Where midday solar crowds the local lines, loss factors fall at midday and recover in the evening. A battery’s exports therefore earn a much higher factor than its charging, and a shared MLF flattens this premium. Limondale and Darlington Point sit in these pockets, and sharing would cost them 2.0% and 0.9% of site revenue.

Where wind or thermal output crowds the lines in the evening, as at Clements Gap and Western Downs, the premium is smaller or negative, so sharing costs little or can even help.

The largest whole-site reduction was 2.8%, at Gannawarra. Here, the battery’s loss is not offset by a gain in the solar. Instead, the negative weighting of the battery’s high import MLF brings the combined MLF below the original solar MLF.

Greenfield hybrids are keeping a shared MLF; separate ownership or connection stages can justify a second TNI

Separate MLFs are generally favourable for total site revenues, and especially for the BESS owner. But because separation requires its own TNI, it is typically only pursued where the battery is registered to a different market participant, or where a retrofit is already reopening the connection agreement.

The benefit of separate MLFs therefore needs to outweigh the additional complexity of separating a project that could otherwise proceed as one hybrid.

New hybrids, especially DC-coupled, are unlikely to register separate TNIs, and will therefore keep shared MLFs

DC-coupled units have not yet demonstrated the telemetry needed for multiple DUIDs, let alone separate TNIs and MLFs. With DC-coupled hybrids’ shared inverters, metering each distributed inverter is prohibitively expensive, so separation would need to rely on estimates.

If DC-coupled assets can qualify for multiple DUIDs with clear metering and setpoints, assets could be tolled separately, and separate TNIs may be possible. But current guidance is unclear.

Regardless, greenfield AC-coupled hybrids that do qualify for separate metering are so far prioritising the connection efficiencies of sharing a TNI, rather than adding the complexity of separate TNIs and MLFs.

What to watch from here

Batteries with their own participant, mostly retrofits, get their own TNI; single-owner hybrids share. As more hybrids enter the market, including DC-coupled projects, more batteries will settle near their solar farm’s factor.

How batteries are tolled, and whether separate metering can be proven behind shared inverters, will determine how many break that pattern.