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improved

v2.3 release: changes since v2.2

8 months ago by Flora Biggins

Quarterly Forecast Pro update in Jan 2024 improves ancillary, balancing and wholesale revenue forecasts

  • Changes to the Modo Battery Revenue forecast reflect the release of the Enduring Auction Capability (EAC) and increasing frequency response market saturation. Frequency response revenues are now lower.
  • Improvements to the forecast of Balancing Mechanism (BM) actions for batteries lead to bigger locational differences in BM revenues in the Modo Battery Forecast. Some areas are higher, and some are lower than previously.
  • We've also updated commodity prices - gas & carbon to reflect the latest data. This has pushed the spreads in our Power Price Forecast down by around 20% in 2024.
  • We have updated the build-out of thermal gas plants. This has made a negligible change to the Power Price Forecast.

More on this below.

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We've updated our methodology pages to reflect these changes - check them out!

Frequency response prices have dropped significantly with the Enduring Auction Capability release in November 2023

  • Changing bidding strategies with the new platform and auction clearing algorithm have driven down prices.
  • Our updated frequency response price forecast takes the new relationship that's emerged between frequency response clearing price and wholesale day-ahead price.
  • We also now allow frequency response prices to be negative - as seen in the market.

As dispatch rates in the BM improve with the Open Balancing Platform, revenues depend on transmission constraints

  • We use supply, demand, current dispatch rates & future transmission build-out of wires and wind, as well as modeled BESS day-ahead positions, to estimate Balancing Mechanism revenues.
  • There are now significant differences in BM revenues from region to region (which are each DNO) in BM revenues, and they change over time as the electricity system develops.

Frequency response volumes of a single site are limited depending on market size

  • With increasing battery buildout, more batteries will compete to provide frequency response services.
  • In the dispatch model, we limit the volume that a single battery site can provide in each service, depending on how big (ie how much MW volume) each service is.

Intraday revenues for the 'Merchant + Ancillaries' grow

  • As the battery fleet grows at a faster rate than ancillary markets, each site does less frequency response.
  • They will have more availability for intraday trading as a result, leading to increasing intraday revenues over time.

You can read about these changes in more detail in our methodology:

N.B. - January 25th 2024 update

After releasing v2.3 of the Forecast model on 19th January 2024, we made a hotfix after further reviewing the numbers & after getting more information from the ESO during a visit to their control room. This impacts the Balancing Mechanism revenues in the first 3 years. We have now better incorporated the precise rollout dates along with our estimated impact of the steps within the Open Balancing Programme. This has brought BM revenues down in the first few years (and closer to reality). We refreshed the v2.3 forecasts in the BESS Revenue library on the 25th January. This change affected forecasts whereby the start date was 2024 and only the first 3 years were affected.