Small <10MW BESS sites

The Modo forecast is built for the scale of typical utility-scale battery storage sites in GB - typically 10-100 MW.

For sites larger than this, check out this page.

For sites that are smaller than this, there are a few things to consider when using the GB revenue curves to forecast returns.

Considerations of the business model of a small site

Small sites are usually co-located with other assets - they often sit with demand. Our forecast does not cover the often complex charging arrangements for offsetting that demand - so the wholesale trading revenue projections may be wrong.
Depending on the site (and its set-up), small sites may not face an hourly wholesale price against which to optimise. This could be due to an element of hedging or fixed price within a PPA. This should be considered particularly if the battery is co-located with demand, or an offtake arrangement with co-located generation.
They may also face additional charges and levies if they don't have a generation license.
It is less likely to be exposed or actively traded in intraday markets because of the operational overheads required.
While allowed, it is more unlikely that a small site of circa 5MW would participate in the BM given the administrative hurdle of registration and operation. This said, the reforms to the control room as a result of the Open Balancing Platform programme of works should open up access to smaller assets.
Issues like the 1MW minimum unit size and integer market granularity in frequency response markets have a significant impact on frequency response revenues.
- For example, one must reserve an amount of the battery's power in head or footroom for managing state of charge while participating in frequency response markets. This might be 10% of the battery's power, depending on the utilisation requirements of the service (Dynamic Regulation being the highest utilisation - and so needing a higher level of state of charge management to ensure the battery can continue to provide the service for the whole of the delivery window).
- This 10% would be equivalent to 500kW at a 5MW site, leaving 4.5MW for the service. Market rules dictate integer MWs, so 4MW would be the maximum available for sale. This would mean a 20% reduction in frequency response revenues (compared to a 50MW site seeing a 10% reduction as it could sell 45MW).
Within the Modo GB index, we track sites that are >= 7MW. This data is used to calibrate our battery revenue forecast. This calibration factor could be different for sites smaller than this (largely due to the rules in frequency response, above).

A custom run is recommended to capture network charges for small sites

Our revenue forecast is made up of line items for frequency response, wholesale trading, intraday trading, participation in the Balancing Mechanism, TNUoS revenues and has the option for DUoS revenues.

Within the run library, we assume a site is connected at Extremely High Voltage (EHV) - typically 132kV and ignore any costs or revenues due to DUoS charges (more here).
It is advised to input the DUoS information on a custom run form to ensure we capture what could be a significant DUoS opportunity within our optimization algorithm.
If the small BESS site is standalone, and part of a portfolio that will have exposure to wholesale day ahead and intraday revenues, as well as frequency response revenues, a custom run should be used.
It is assumed that revenues from the Balancing Mechanism will be equivalent on a £/MW basis as a larger site, as OBP evens the playing field to give all BM-registed units equivalent access. However, this revenue line should be taken as £0 if the site is not to go through the administrative hurdle of registering as a BM unit.