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 FCAS revenues make up somewhere between 90%-70% of total battery storage market revenues, however, we would expect this proportion to decrease in the future as prices for FCAS in the near to medium term decline and the volatility in the wholesale energy market increases and batteries take advantage of 5-minute settlement (to be introduced later this year).

Ben Cerini

Ben Cerini

To keep reading, please log in to your account or sign up for free

Alternatively, please sign up to receive free market insight online and direct to your inbox

Log in or sign up for free
Contact us

Related thinking

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...

Commercial and market outlook

Do batteries add viability to electrolysers within the current market?

Last month, the Australian Competition and Consumer Commission (ACCC) announced that there will be a gas shortfall in the east coast market in 2023, not a surprise considering the international gas crisis and high gas prices in Australia. Such events have increased attention towards expanding gas supply or reducing the...

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...

Commercial and market outlook

Back to the Future P-IV: Are P5 Forecasts reliable?

Is there a correct way to be one step ahead of your competitors? Do you want to be able to know the price before settlement accurately? The P5 Reports supposedly provide this… or do they? Many participants use this data to determine optimal outcomes for their fleets. Still, there is...

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...

Commercial and market outlook

Hogging the spotlight: the opportunity in the evening peak

As the duck curve steepens and renewable energy penetration increases in the NEM, we briefly examine revenue share by time of day and highlight the growing opportunity in the evening peak. Will this become the new normal, with revenues increasingly concentrated in just one part of the day? Or will...

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...

Commercial and market outlook

Mandated PFR tunes out regulation FCAS markets – What happens to batteries?

The introduction of the mandatory Primary Frequency Response (PFR) in September 2020 improved frequency control of the NEM considerably, as highlighted by AEMO. In this Chart of the week, we look at NEM mainland FCAS regulation services dispatch before and after PFR implementation and the behaviour of the Hornsdale Power...