Macro scenarios: low case

Modo forecasts a 'low' case for future revenues of battery energy storage.

The low case assumes more conservative fundamentals & battery dispatch

• We revise our assumptions around the carbon de-rating factors in the future capacity market which slows the retirement of unabated gas
• We take 15% off the price of gas and carbon along the curve
• We allow 50% more Demand Side Response capacity on the system, and halve its short-run marginal cost. It acts as a competitor to battery energy storage
• We lower the dispatch rate of battery actions in the Balancing Mechanism and slow the uptake of improvements to skip rates due to the open balancing platform - see graph below
• We reduce the uplift due to intraday trading actions
• We reduce the calibration factor by 10% with the Modo Benchmark to recognize that some assets do worse than others.

Note: Gresham House Energy Storage Fund revenue projections are taken from their 2023 Annual Report, published in April 2024.