We model two battery dispatch strategies to reflect different risk profiles

The merchant-only dispatch strategy models revenues with a higher risk profile

Here, the battery is optimized in:

• Day ahead half-hourly wholesale markets
• Intraday markets, capturing non-physical trading and churn
• The balancing mechanism
• Capacity market & TNUoS (triad) revenues are also given.

The initial strategy is set at the day-ahead stage, with re-optimization intraday and up to delivery. Cycling once, with a 1-hour system in day-ahead wholesale markets, means a BESS is idle for 90% of the day, leaving a significant portion of the battery's flexibility to be monetized in real-time markets (i.e., the balancing mechanism).

This is inherently riskier, as opportunities are not always available in in real-time. Spreads are generally highest in the Balancing Mechanism, as taking actions very quickly is expensive, but dispatches are more uncertain. As a result of the higher risk profile, revenues tend to be highest here over the project's lifetime.

The merchant & ancillary dispatch strategy models revenues with a lower risk profile

Here, the battery is optimized in:

• Dynamic Frequency Response services
• Day ahead half-hourly wholesale markets
• Intraday markets, capturing non-physical trading and churn
• The balancing mechanism
• Capacity market & TNUoS (triad) revenue are also given.

The initial strategy is set at the day-ahead stage, with a cross-optimisation between day-ahead wholesale trading and dynamic frequency response services. A battery cycling once per day here may have more than 50% of its flexibility pre-contracted at the day-ahead stage in ancillary markets.

The remaining flexibility of the system can be dispatched into intraday markets and the balancing mechanism (while meeting the requirements of the ancillary service provision).

More contracts (and revenues) are locked in at the day-ahead stage, making this a less risky strategy. The revenues tend to be lower here over the lifetime of the project.

That said, we do re-rate the amount of cycling by 30% post-2027 to enable systems to capture more revenue uplift in the BM. Why 2027? Because that's when all the changes to control room infrastructure should be complete - meaning there will be more certainty of dispatch in the BM then.