Batteries that use Quick Reserve intelligently - stacking it with Balancing Mechanism revenues, avoiding commercial penalties, and tailoring strategy to grid location - outperform the ME BESS GB Index. Success hinges on using Reserve with their primary revenue strategy and avoiding commercial penalties, not just securing high availability payments.

Quick Reserve launched 6 months ago, and key elements of the service’s penalty system will be implemented in Balancing Reserve too. Reserve (Quick and Balancing) now makes up 13% of the revenue stack for batteries in Great Britain. This means operators and owners need to be familiar with what these penalties are and how they are applied - plus how to navigate them.

Quick Reserve has high revenue potential - but penalties undermine it

• Since its launch in December 2024, the service has contributed 12% of total battery revenue.
• Batteries alone provide the service, unlike Balancing Reserve, where they compete with gas generators
• On average, prices are three times higher in Quick Reserve than in Balancing Reserve
• However, NESO has capped requirement volumes at 500 MW, limiting market expansion despite plans for dynamic procurement
• This is because batteries have been unable to deliver on their Reserve contract up to 10% of the time
• NESO applies penalties to encourage improved availability - some penalties cost up to 5% of monthly revenue in a single settlement period

What are Quick Reserve penalties?

When batteries fail to deliver their Reserve contract, they incur a penalty. NESO applies two types of penalties:

• Technical unavailability: When a battery runs out of energy (or holds too much) it loses its availability payment
• Commercial unavailability: When a battery operates in other markets (e.g. wholesale) and ignores its Reserve contract. The cost of the most expensive Balancing Mechanism action in the direction of the service determines the penalty (Offers for Positive Reserve and Bids for Negative Reserve).

Modo Energy subscribers get the full breakdown, including:

• How top batteries stack Quick Reserve and Balancing Mechanism revenues without triggering penalties
• The strategies costing operators thousands in avoidable losses (and how to spot them)
• A data-driven look at how much revenue is being lost—and who’s losing it
• Whether penalties are changing battery behaviour in Reserve markets

Winning batteries use a stackable strategy

Stacking services = higher revenue. That’s because stackable services involve earning revenue using the same power allocation in the same direction Aside from the Capacity Market, the only stackable services are Reserve and the Balancing Mechanism. Other strategies, like frequency response and wholesale, involve power allocation.