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2023 has come to a close. So what were the main headlines for battery energy storage in Q4?
Battery developed in GB delivered 419 MW of new operational capacity. This was a record quarterly increase. However, The deployment rate throughout 2023 has been relatively flat.
Elsewhere, the one-hour BESS index fell from £47k to £36k/MW/Year. And the two-hour BESS index fell from £68k to £54k/MW/Year from Q3 to Q4. This reduction in revenues has followed the launch of the Enduring Auction Capability on November 2nd. This has improved the efficiency of procuring Frequency Response with prices falling by 53% by the end of the quarter.
This fall combined with increasing amounts of uncontracted capacity means a record 75% of battery revenue came from merchant markets into December, with all but the shortest duration systems now active in the wholesale market. Some one-hour Balancing Mechanism batteries are a Dynamic Regulation High focus strategy, taking market share from two-hour systems.
Meanwhile, Non-Balancing Mechanism registered back have capitalized on higher Dynamic Regulation load prices.
The shifts in operational strategy primarily among the one-hour systems increased the average cycle rate of batteries to 1.15 per day by the end of 2023.
Many probably saw this as necessary to still hit revenue targets. With declining revenues this quarter, the value of a second cycle increased. A one-hour battery cycling twice daily was able to increase revenues by 30% in Q4. Finally, on December 12th, the ESO launched the Bulk Dispatch Functionality in the Balancing Mechanism.
This was switched off for batteries after 3 days because of technical problems before being restarted again in early January.
Despite this, December saw a new record for battery dispatch volume.
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2023 has come to a close. So what were the main headlines for battery energy storage in Q4? Battery developed in GB delivered 419 MW of new operational capacity. This was a record quarterly increase. However, The deployment rate throughout 2023 has been relatively flat. Elsewhere, the one-hour BESS index fell from £47k to
£36k/MW/Year. And the two-hour BESS index fell from £68k to £54k/MW/Year from Q3 to Q4. This reduction in revenues has followed the launch of the Enduring Auction Capability on November 2nd. This has improved the efficiency of procuring Frequency Response with prices falling by 53% by the end of the quarter.
This fall combined with increasing amounts of uncontracted capacity means a record 75% of battery revenue came from merchant markets into December, with all but the shortest duration systems now active in the wholesale market. Some one-hour Balancing Mechanism batteries are a Dynamic Regulation High focus strategy, taking market share from two-hour systems. Meanwhile,
Non-Balancing Mechanism registered back have capitalized on higher Dynamic Regulation load prices. The shifts in operational strategy primarily among the one-hour systems increased the average cycle rate of batteries to 1.15 per day by the end of 2023. Many probably saw this as necessary to still hit revenue targets. With declining revenues this quarter,
The value of a second cycle increased. A one-hour battery cycling twice daily was able to increase revenues by 30% in Q4. Finally, on December 12th, the ESO launched the Bulk Dispatch Functionality in the Balancing Mechanism. This was switched off for batteries after 3 days because
Of technical problems before being restarted again in early January. Despite this, December saw a new record for battery dispatch volume. That’s your quarterly wrap up. Ta- ra.