Battery energy storage revenues are linked to how much a battery cycles. Getting more energy out of the system means greater opportunity to earn money through arbitrage. 2024 has seen revenues move away from frequency response and towards wholesale trading and the Balancing Mechanism. So, how has the value of additional cycles changed as a result?
This article looks at how batteries have been cycling in 2024, the differences between how one and two-hour batteries operate, and the value additional cycling provides to both sets of systems.
Battery energy storage cycling in 2024 peaked in April
At the start of 2024, batteries averaged 1.1 cycles per day. This average has continued throughout 2024, with average battery cycling remaining at 1.1 per day. However cycling increased to 1.2 per day in April, as battery energy storage revenues increased to their highest level in six months.
This rise was driven by one-hour batteries increasing their cycling rate. Negative prices and high wholesale power price spreads encouraged these systems to cycle harder to maximize revenues. Overall, one-hour batteries cycle more than two-hour: 1.2 per day so far in 2024 vs. 1 per day, respectively.
In the last two weeks of July, wholesale price spreads fell to £37/MWh. This reduced the cycling rate of two-hour batteries to 0.9 per day, the lowest level since January. Despite the lower price spreads, one-hour batteries continued to perform 1.2 cycles per day.
Some batteries cycle more than others - especially for one-hour systems
While the monthly average cycling rate has stayed between 1.1 and 1.3 per day, some batteries operate outside this window. Some one-hour batteries have cycled up to 2.5 times per day for an entire month, while others were as low as 0.1 cycles per day. Two-hour batteries operate in a narrower range, with 95% of two-hour battery energy storage systems cycling between 0.5 and 1.5 times per day.