June 2022 Leaderboard

To go alongside the publication of our June 2022 Leaderboard, Quentin and Imrith discuss battery energy storage system (BESS) trends and strategies from last month. In the video below, you can see which markets helped boost the BESS revenue stack in June. You’ll also be able to dive deeper into these revenues on an asset-by-asset basis.

Leaderboard analysis

Fleet revenues

Figure 1 (below) shows the average fleet revenues for BESS assets in Great Britain (GB), from January 2020 to June 2022 (inclusive).

In June 2022, average earnings (£/MW) for BESS assets increased by 71.92% from the previous month - to an annualised revenue of £269,456/MW.

Asset revenues

Figure 2 (below) shows the revenues of assets on the Modo Leaderboard in June 2022 (excluding Capacity Market contracts).

Asset strategies can be split into three categories:

• Strictly participating in Firm Frequency Response (FFR).
• Strictly participating in Dynamic frequency response services.
• Participating in both Dynamic services and FFR.

Figure 3 (below) shows asset revenues for the different operational strategies taken in June 2022.

• Assets which didn't strictly provide Dynamic frequency response services on average had the highest revenues (£26,934/MW).
• The average revenue for the seven BESS assets solely providing FFR was £11,731/MW - the lowest of all four operational strategies. With the highest-earning asset (Rock Farm) making less than both the lowest-earning assets in the other two strategies.
• However, the higher accepted bid prices in FFR this month meant that solely providing FFR was on average 20% more lucrative than in May.

Operational spotlight - Contego

June saw extremely high clearing prices in Dynamic Containment. However, Tesla-operated Contego found itself at the top of the Leaderboard because it utilised a different operational strategy. This is highlighted in Figure 4 (below), which shows the operational profile of Contego on 17th June.

• The day before, Contego was providing the high DR service in EFA block 6. This meant that it was charging up whilst also being paid an availability fee to do so.
• In EFA blocks 1, 2 and 3, the asset continued to provide the high-frequency Dynamic Regulation service whilst also dispatching 71 MWh in wholesale markets. This allowed it to earn additional merchant revenues that augmented the availability fee paid in DR.
• In EFA block 4, the asset stopped dispatching energy and charged up to provide DC symmetrically, which cleared at £88.39/MW/h (when de-rated 90%).
• In the first settlement period of EFA block 5, the asset dispatched 16.5 MWh. It then provided the high-frequency DR service again, allowing it to begin exporting (when charged up) in wholesale markets again the following day.
• This strategy was lucrative. However, it should be noted this operational behaviour was much more strenuous on the battery, with multiple operational cycles per day. If the asset had solely provided Dynamic Containment, for example, there would have been less stress on the battery.

Further analysis - June markets in review

Dynamic services clearing prices

Figure 5 (below) shows the average clearing prices (volume-weighted) in DC, DM, and DR for June 2022.

• On average across the month, low-frequency Dynamic Containment (DCL) cleared at £38.01/MW/h.
• The average clearing price for providing the service symmetrically (at 90% rated power) was £37.90/MW/h in June. This was 65% higher than in May.
• However, it was more lucrative to provide the low-frequency DC service at full capacity than to de-rate capacity and provide the service symmetrically.
• DM retained clearing prices similar to last month’s (~£6/MW/h) in both the high- and low-frequency services. Only three assets - Lascar Works, Hulley Road, and Red Scar - provided the service at all, and they did so for just 15, 25, and 5 EFA blocks of a possible 180 (respectively).

Firm Frequency Response

Figure 6 (below) shows bids accepted in FFR for the 20 assets that participated in the service in June 2022, by EFA block.

• Six more assets provided FFR in June than in May.
• Prices in EFA blocks 1-4 (11pm-3pm) were significantly lower than in EFA blocks 5 and 6 (3pm-11pm). On average, they were £10.16/MW/h vs. £29.71/MW/h.
• FFR is a pay-as-bid auction, and there was a wide spread of bids in the peak EFA blocks. Accepted bids ranged from £5.42/MW/h to £38/MW/h.

BESS activity in the BM

In June 2022, Balancing Mechanism (BM) revenues made up just 0.07% of GB BESS revenues. Figure 6 (below) shows the daily BM revenues for all BMU-registered BESS assets.

Wholesale prices

There were few instances of high intraday price spreads in wholesale markets during June 2022 (as expected in summer). However, we still saw unusually high wholesale spreads at times. This is highlighted in Figure 7 (below), which shows the average daily spread available in Nordpool’s day-ahead hourly auction. Because of the opportunity cost in DC throughout the month, BESS assets largely decided against entering into wholesale markets. Two exceptions here were the two-hour Tesla systems, which generally exported whilst providing the high DR service.

What did success look like in June 2022?

The Modo benchmark for June 2022 was £23,548/MW for the month. Those assets making a higher return than this could be considered more successful than the average.

Unlike previous months, the most successful assets - those generating the highest revenues - were those that largely provided DC and not FFR (with the exception Claredown Farm). Assets most frequently accepted into DC were able to capture the high clearing prices we saw throughout June 2022. Contego and Holes Bay stood as outliers to this trend, utilising the high-frequency DR service to charge up (and be paid to do so) whilst dispatching in wholesale markets at the same time - albeit at the cost of more cycles per day.

June has been the most lucrative month ever for battery assets in GB. Revenues were 46.29% higher than in February 2022 - the previous all-time high! It’ll be exciting to see how revenues evolve from here.