Executive Summary:
Wind generation plays a crucial role in shaping battery energy storage revenues in Great Britain. A 10% rise in wind generation can increase battery revenue forecasts by 2-5% between 2025 and 2029, driven by deeper price troughs, wider spreads, and more cycling opportunities.
As wind capacity expands, its influence on power prices becomes more pronounced, making wind variability a key factor in assessing battery revenue forecasts. Understanding this relationship is critical for battery operators and investors to manage risk and optimize revenue strategies.
Inside this report:
- A detailed sensitivity analysis on wind load factors, power pricing and battery revenue.
- Analysis of historical annual wind loads.
- The reason higher wind loads have an asymmetrical impact on price spreads.
- Why battery cycling rates are evolving as wind capacity grows.
- How each wind scenario influences daily battery operations.
Wind generation’s growing influence on battery revenues
In summer 2024, battery energy storage revenues were closely tied to wind generation. More than ever, batteries participated in energy trading via the wholesale markets and the Balancing Mechanism. In these markets, power prices — and the resulting spreads — are heavily influenced by the balance between wind generation on the system and demand.