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Categories
Energy storage and flexibility
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Energy storage and flexibility
Turning Japanese: Typical power price spreads in Japan
Cornwall Insight has been supporting customers in the Japanese market for some time now. This Chart of the week explores the daily spreads seen in recent quarters and why a number of international players are turning to Japan. The Japanese market has experienced substantial volatility in recent quarters. The island...
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Energy storage and flexibility
Out with the old, in with the new: T-4 Capacity Market clears at record price
On 21 February, the T-4 Capacity Market auction for Delivery Year 2026-27 cleared at a record high price of £63.00/kW/year, procuring 43,000.955MW of capacity. In this week’s 'Chart of the week', we explore the key takeaways from the auction.
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Energy storage and flexibility
A pebble in the water makes a ripple effect…
At demand levels averaging only ~200-700MW, FCAS markets are dwarfed by the ~20,000MW energy demand in the NEM. Nonetheless, with 8 different markets to participate in, the potential value that participating in FCAS can add to a participant's revenue should not be underestimated. In this Chart of the week, we...
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Energy storage and flexibility
Delays to NEM connections and accurate forecasts
AEMO is currently consulting on its methodology for reliability forecasting in the NEM, and among their proposed changes is an adjustment to the inclusion of projected new capacity. The existing assumptions are being examined due to two factors; Most new connections in the NEM assume that the time taken to...
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Energy storage and flexibility
Crying over spilled solar – how much can a battery help?
A standalone battery earns its revenue not only from the arbitrage opportunity between day and night prices but also from participation in FCAS markets. This remains true when the battery is paired with a solar farm but can be complicated by constraints or trade-offs between FCAS participation and solar export....
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Energy storage and flexibility
What’s GoOing on with REGOs?
The world of Green Certificates is a complex area of the energy sector and is set to become more-so as we head towards a period of major regulatory change in 2023. The EU’s Guarantee of Origins (GoOs) and GB’s equivalent Renewable Energy Guarantee of Origin (REGOs) are certificates proving the production...
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Energy storage and flexibility
DFS – home delivery now available
On 4 November, Ofgem granted approval to the National Grid ESO proposal to create a demand flexibility service this winter. This will allow consumers and businesses to be paid for the first time to reduce or shift their electricity usage out of peak periods this winter following a signal from...
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Energy storage and flexibility
Christmas comes early for South Australian battery owners
The choice of Chart of the week was an easy one following Saturday’s storms that ‘reined’ down on South Australia. The state became isolated from the rest of the National Electricity Market after one of ElectraNet’s pylons, supporting the interconnector between SA and Victoria, was knocked down[1]. The consequence...
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Energy storage and flexibility
State of Storage: Investigating battery profit for NEM states
It has been an interesting year for Australian energy markets, facing unprecedentedly high energy prices, coal outages, and market suspension. In today’s Chart of the week, we will investigate the impact a BESS would have made during FY 2022. Using Cornwall Insight Australia’s battery simulation model, we simulated a stand-alone...
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Energy storage and flexibility
It’s My Birthday – Two years of Dynamic Containment
October marks two years since the launch of the frequency response service, Dynamic Containment (DC). Its inception was the first in the roll out of new faster-acting frequency response services, accompanied by Dynamic Moderation (DM) and Dynamic Regulation (DR) earlier this year. In this week's 'Chart of the Week', we...
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Energy storage and flexibility
Record renewables pipeline: will investors reconsider after UK proposes green revenue cap?
News this week that the UK government is mulling over a cap on green generation revenues comes at a time when our research finds that the investment pipeline for electricity renewables generation is the highest it has ever been. In our Renewables Pipeline Tracker (RPT) service we analyse the growing...
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Energy storage and flexibility
National Grid outlines Winter Demand and Supply scenarios
National Grid Electricity System Operator (ESO) and National Grid Gas both published their respective 2022-23 Winter Outlook reports on 6 October. The reports are published at a time of unprecedented flux both domestically and aboard, largely stemming from the Russian invasion of Ukraine earlier this year. In this week's 'Chart...
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Energy storage and flexibility
Unlocking REMA: emerging market views
Recent market events have continued to highlight the challenges of the energy trilemma, specifically the need to decarbonise the energy system while ensuring energy security and affordability. The government announced in April 2022 it would be undertaking a Review of Electricity Market Arrangements (REMA) to address these issues, and in...
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Energy storage and flexibility
It’s a fix! BEIS floors competitive energy market
Last week saw the government announce the Energy Price Guarantee (EPG) which will see the typical dual fuel household’s unit rates capped at 34p/kWh for electricity and 10.3p/kWh for gas. Customers on fixed tariffs will get support to bring their tariffs down to the same level, up to 17p/kWh of...
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Energy storage and flexibility
Now we’re peaking with gas: how much evening NEM demand could be replaced with batteries?
The events leading up to the recent market suspension in June have highlighted the role that peaking gas-fired generation plays in satisfying demand and setting prices across the NEM in the morning and evening peak periods. The team recently explored some of the drivers and effects of these events in...
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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....
