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Categories
Energy storage and flexibility
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Energy storage and flexibility
“Each day looking for new ways to go on”: could a renewable capacity market assist hydrogen turbines?
The rise of renewables has seen the need for additional firming capacity in order to smooth renewable output and replace coal capacity in the evening peak. The ESB and federal Ministers are currently in discussions regarding the development (or not) of a capacity market for the NEM. Interestingly from the...
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Energy storage and flexibility
Sky-high prices in Dynamic Containment
In this week’s ‘Chart of the Week’, we explore the drivers behind the record high prices seen in the Dynamic Containment Low service in June, which saw individual assets accrue gross revenues of over £1mn, and consider the outlook for future service prices.
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Energy storage and flexibility
Chart of the week | The summer of our discontent?
Wholesale power and gas prices have surged significantly in the past year and have been highly volatile alongside rapidly unfolding geopolitical events. This summer, the overall direction of energy prices could move in a number of ways, dependent on further sanctions and counter-sanctions between Russia and the West, as well...
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Energy storage and flexibility
Hydrogen hype: How cheap the hydrogen from electrolysis can be?
Hydrogen is considered a potential replacement for fossil fuels for energy generation, transport etc. Currently, 96% of hydrogen production originates from fossil fuels through steam reforming and coal gasifications. Only a small fraction (~4%) is produced via electrolysis. The high Capex of the electrolyser is usually referred to as the...
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Commercial and market outlook
BSUoS charges: volatility, deferral and reform
Over the last few years Balancing Services Use of System (BSUoS) charges have experienced significant volatility, with costs reaching record high levels which have added to the rise in consumer electricity bills and ultimately resulted in intervention in order to cap BSUoS rates. In this Chart of the week', we...
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Energy storage and flexibility
Price spikes in Queensland: Is solar revenue affected?
In the last few months, we have seen a substantial number of high price intervals in Queensland. Increased Market Demand on 9 March and the simultaneous trip of Gladstone units 3 and 4 on 31 March spiked energy prices to $8,800/MWh and $15,100/MWh levels, respectively. These price spikes occurred between...
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Energy storage and flexibility
“Fixing” Balancing Costs
The challenge of keeping the national transmission system balanced and stable in real-time is becoming increasingly challenging and expensive. Demand is becoming more unpredictable alongside a generation fleet that is both increasingly intermittent and increasingly distributed. Unsurprisingly, costs have risen. In this 'Chart of the week', we take a look...
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Energy storage and flexibility
T-4 Capacity Market Results: New build battery storage leads the way
On 22 February 2022, the T-4 Capacity Market (CM) auction for Delivery Year 2025-26 cleared at £30.59/kW/year. This was the highest ever clearing price in a T-4 GB CM auction and followed the T-1 auction for 2022-23, which cleared at the highest ever GB CM price of £75/kW on 15...
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Energy storage and flexibility
Fast Frequency Response (FFR) market: Is the NEM prepared for a new market?
In July 2021, final rules were published to introduce two new market ancillary services – a very fast raise and very fast lower service. These markets would provide an FCAS contingency response faster than the existing 6-second market. The Fast Frequency Response (FFR) markets are set to commence on 9...
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Energy storage and flexibility
Seasonal frequency in the NEM: is VRE continuing to drive it?
Frequency control remains a challenge for AEMO. New PFR (primary frequency response) provisions established in March 2020 will help AEMO to control frequency more efficiently. However, is it yet to be seen how market participants will be incentivised to participate in PFR market. In light of the rapid growth of...
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Energy storage and flexibility
How deep is your love? A look at the depth of negative prices in South Australia
The recent rise in the frequency of negative wholesale energy prices in the NEM has captured the attention of many market observers. A less-discussed aspect is how deep these negative prices run. How much additional demand could be added to the system during the negative-priced dispatch intervals before the prices...
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Energy storage and flexibility
Houston, we have a transmission problem
Variable Renewable Energy is making tremendous strides towards the predominant energy source in the NEM, but its voracious capital intensity is over-running existing transmission capacity. Consumers are faced with a $3.5bn transmission build cost over the next 20 years, which to return value relies heavily on the emergence of grid...
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Energy storage and flexibility
Why invest in batteries?
Batteries currently participate in the wholesale arbitrage and FCAS services (contingency and regulation). However, a lack of clarity in policies and regulations specific to batteries create uncertainties for investors. The key challenge is to determine and capture all possible battery value streams (current and future services). Stacked value streams increase...
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Energy storage and flexibility
Minimum demand projections in Victoria
The surplus rooftop solar provides an enormous opportunity for additional flexible load, where this can be optimised during the day. Electric Vehicles acting at a distributed level (exactly where the surplus is arising) provide the perfect solution if utilised in conjunction with smart metering to assist in mitigating these issues....
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Energy storage and flexibility
Spring is here, where are you?
With the onset of spring in September, we typically observe a drop in demand in NEM. However, this year the decline in demand has seen NEM and multiple states breaking several records for minimum operational demand in the middle of the day, which is largely driven by solar penetration in...
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Energy storage and flexibility
Renewables PPA market see increased capacity amid more long-term deals being signed, but challenges remain
In this 'Chart of the week', we outline the latest research from our Renewable PPA Market Share report. Through this report and our supplementary Renewable PPA Market Tracker, we track and record details of renewable Power Purchase Agreements (PPA) and the amount of renewable PPA capacity held by offtakers in...
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Energy storage and flexibility
Dispatchable capacity – it’s a marathon AND a sprint
For now, incumbent generators (like coal) will need to meet the NEM ramping requirements. Provided that coal remains online with the current dispatchable capacity, there is likely to be sufficient capacity in reserve to meet the ramping requirements of the system albeit in an incremental way (every five minutes). However,...
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Energy storage and flexibility
I can be your hydro baby, I can ramp away the pain
The recent suite of energy market reforms proposed by the Energy Security Board (ESB) has prompted much discussion about the type of capacity that needs to be procured in a future NEM that seems certain to have a very high penetration of variable renewable energy (VRE). In this Chart of...
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Energy storage and flexibility
A tale of two causes: curtailment as renewable records break
Renewable generation records continue to fall in the NEM, with several dropping in succession over the last week. As the amount of renewable generation in the NEM increases (led by a world-leading uptake of rooftop solar), as does the amount of curtailment. As curtailment is essentially wasted energy, minimising it...
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Energy storage and flexibility
A look into Battery fires (Risk and mitigation)
Most people have multiple devices powered by a lithium-ion battery (LIB), which can be found in almost every portable device (e.g. smartphones, laptops etc). However, due to the small battery size in these devices, they are relatively simple to control. LIB deployment at utility scale in the energy market, however,...
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Energy storage and flexibility
A look into large-scale battery market revenues FY20-21
This Chart of the week examines the distribution of daily battery revenue that was generated in FY21 for the batteries operating in the NEM over this time frame. Net Energy revenue is calculated as the revenue generated in the energy markets less cost of charging plus any revenue earnt from...
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Energy storage and flexibility
Feeding the future NEM – Eat some now. Save some for later.
As the NEM continues to transition towards increased penetration of variable renewable energy (VRE), the use of the word ‘curtailment’ has also increased. While curtailments have historically been a natural part of market outcomes (i.e. generators withholding capacity at higher price points), the increased prevalence of curtailment of VRE is...
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Energy storage and flexibility
Australian Chart of the week | Slip slidin’ away, You know the nearer your destination
In our previous ‘Chart of the week’ back in November 2020 (Issue 61), we looked at the projected uptake of battery storage projects in the National Electricity Market (NEM). Nine months on, with a number of large projects announced, we felt it was worth an update. In our last chart,...
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Energy storage and flexibility
Grid works hard for the money: an annual look back at BSUoS
This weeks Chart of the Week takes a look at the costs incurred from balancing the electricity system over the last 12 months. The cost of all the actions and day-to-day operation of the electricity system are recovered through Balancing Services Use of System (BSUoS) charges. This changes in each...
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Energy storage and flexibility
Australian Chart of the week | Supply creates its own demand: negative pricing in the NEM
In the National Electricity Market (NEM), generators offer the prices at which they are willing to supply electricity to the system operator – the Australian Energy Market Operator (AEMO) – who in turn matches these offers with demand on a least-cost merit order basis. The offer price of the last...
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Energy storage and flexibility
Chart of the week | Back in from the cold: the resurrection of STOR procurement
On 1 April National Grid ESO commenced procuring Short Term Operating Reserve (STOR) at the day-ahead stage, reviving the procurement of the STOR service since it was halted back in December 2019. The freeze in the procurement of firm STOR contracts and the eventual move to day-ahead procurement was driven...
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Energy storage and flexibility
Australian Chart of the week | Hydrogen plants could profit in South Australia
The South Australian Labor party has committed to building a hydrogen production, storage and electricity generation facility if elected at the next SA State election. Their proposal includes a $220 million 250 MWe electrolyser, $31 million for 3,600 tonnes of liquefied hydrogen storage and $342 million for a 200MW CCGT...
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Energy storage and flexibility
Chart of the week | Interactions between frequency response markets – can’t get enough
Frequency response markets are in a period of transition, as the Electricity System Operator (ESO) looks to usher in a new suite of three faster-acting frequency response services that can better manage frequency changes on a low inertia, high renewables system. Dynamic Containment (DC), the first of these new services,...
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Energy storage and flexibility
Australian Chart of the week | Round and Round the Market: Black Coal vs Batteries
This year appears to be the year of the battery, with the volume of projects that have been announced or in some stage of planning approaching the 10GW mark it is worth taking a look at how batteries are performing in the FCAS markets over the last two years. Currently...
