Investor says battery use in Balancing Market remains ‘sporadic’ due to IT delays

System Operator NGESO’s struggles with a new online platform intended to make better use of batteries to balance power supply and demand have exacerbated market conditions that have driven down battery revenues, according to battery investor Harmony Energy Income Trust.
Harmony said its energy storage revenues for the year ended 31 October 2023 were markedly lower than the same period in 2022, and while a reduction had been forecast, “the scale and the speed of the reduction has exceeded market expectations”.
Harmony said there were three factors at play. First, ancillary service markets are saturated, due to flood of battery projects, which “has driven clearing prices to record low levels”. Second, wholesale power price volatility and spreads have decreased, because gas prices have fallen because of the warm weather and high levels of European reserves.
The third factor was implementing NGESO’s dispatch platform. NGESO planned to increase battery dispatch rates via process and software enhancements over 2024 and 2025 but Harmony said NGESO’s use of batteries in the Balancing Market was still “sporadic”. A December 2023 launch of new software that would make it easier for NGESO to call on batteries had been rescheduled for 8 January, due to technical issues, but NGESO was still only using the platform intermittently. Harmony said that inconsistent calls on batteries by NGESO meant that Harmony’s algorithms and AI software could not best execute revenue strategies.

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