Frequency Response market saturation

TLDR; Frequency response markets are super competitive.

We handle this in the model by restricting how much each battery can do.

As battery buildout increases, saturation in frequency response services will increase.

This means that each individual battery will, on average, provide a lower proportion of frequency response services and increasingly trade in wholesale.

We quantify this using the projected battery buildout and frequency response requirements:

% of battery fleet accepted in frequency response service = Total service requirement / Total battery buildout

We then calculate the average MW that an individual battery can provide for each frequency response market by multiplying % of fleet acceptance by battery maximum power, MW. For example, if 50% of the fleet can provide Dynamic Containment, then our model would allow a 10 MW battery to provide up to 5 MW of Dynamic Containment.

GB requires more response for Dynamic Containment compared to Dynamic Regulation and Dynamic Moderation.

Therefore, batteries will provide more Dynamic Containment than the other services, on average. Our dispatch model allows greater volumes to be provided for Dynamic Containment to reflect this (see example dispatch here).