Large >300MW BESS sites v31

We do not recommend using our Central curve to forecast (very) large BESS sites.

A battery of 50MW is a different proposition to one of 1000MW, so we have an alternate way of producing curves for these assets.

Essentially, we expect a lower £/MW/year.

What does large mean?

There is a ramp rate restriction on any single generator site at a Grid Supply Point that kicks in at 300MW. For this reason, we determine that 'large' is anything over 300 MW (BC.1.A.1.1. of the Balancing Code, here).

How many 'large' sites are operational now?

Currently, there are 3 BESS sites operational of 100MW:

Dollymans, which exists as a single BM unit
Minety, which is split into Minety Lower and Minety Upper, both 50MW
Capenhurst, which is split into 4 x 25MW units.

There is also another asset due to come on later this year, Blackhillock, which is 200MW (400MWh), and will be split into two BM units. Stratera's Thurrock (300MW, 600MWh) is also due online soon.

However, in 2025 and 2026, we expect more larger assets to come online, and the Modo buildout report includes a number of projects >300MW.

How might a large site be operated?

It's difficult to say exactly, as we don't have any operational right now!

Big BESS sites are likely to be split into several sub-units – a 1GW BESS might (for example) be split into 6, and (some of their) operations may resemble pumped hydro - more like Dinorwig!

One (or more) subunits might be contracted under longer-term contracts or tolled, hedging some of the risk and probably taking a lower £/MW as a result.
Other units will be exposed to merchant revenues. These revenues are lower purely due to the ramp rates restrictions on such a unit as per the Balancing & Settlement Code (BC.1.A.1.1.)
Parts of one of the units might hold an ancillary service contract. There is (July 2024) a limit on the amount of frequency response a single unit can delivery: 50MW for DR and DM, and 100MW for DC. We expect all three to be at a 100MW limit by the end of the year. Of course, these markets are already fully saturated and therefore we would not forecast any sub-unit to be delivering these services at its full capacity.
For usage in the Balancing Mechanism, dispatch rates are likely to be much higher, but the amount of energy used is not likely to be the full capacity of the system, as the control room won’t always need 500MW+.

Our central forecast won’t capture all of these nuances.

What impact do these ramp rate restrictions have?

The amount of energy that can be charged and discharged is restricted, depending on the duration of the action. An example of a 1 hour charge and discharge is shown below, for different sized BM units. The longer the duration of charge or discharge, the lower the impact.

These ramp rates do not apply in the Balancing Mechanism.

Recommendations for modeling the revenue stack of large assets

First 100MW

100MW of ancillary-focussed strategy (central scenario): driven by the cap on unit size in dynamic frequency response services. There will be day ahead, intraday revenues, balancing mechanism, as well as frequency response revenues here.

Next 200MW (total 300MW)

200MW of merchant-focussed strategy (central scenario)

Next 300MW (total 600MW)

300MW of merchant-focused strategy (low scenario).

The second portion is likely to return a lower £/MW than the first 300MW, in a similar way to the second hour of wholesale trading is worth less than the first.

We would recommend using our low scenario for this portion of the site's revenues. This portion will be merchant only, but restricted by ramp rates.

Depending on the size of the asset, there is also a reduction due to ramp rate restrictions. Assuming the battery would discharge for a 1h period 50% of the time and a 2h period 50% of the time. The above chart shows this ramping derating is around 95% for a 600MW system. Given we are already taking a low scenario here (20-25% below central, depending on the specific run) we can neglect this here, bringing it in for larger units.

Next 300MW (total 900MW)

300MW of merchant-focused strategy (low scenario): along with a reduction in day-ahead and intraday revenues due to ramp rate restrictions. For a 900MW system, this derating is ~10%.