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Energy storage and flexibility
In our ‘The VFF… Very Fast and Financially rewarding market so far’ Chart of the week, the two new contingency markets, the Very Fast raise contingency FCAS market and the Very Fast lower contingency FCAS, were analysed and demonstrated the high participation of big batteries along with VPPs and DERs....
"We can see the country is travelling in the right direction towards a renewables-based electricity system, however, our estimates continue to show it is simply not fast enough to deliver on government targets."
On 9 October 2023, 1pm (market time), we saw the start of two new contingency FCAS markets. The Very fast raise contingency FCAS market, and the Very fast lower contingency FCAS. Upon commencement of the VF FCAS market, a commissioning period of two weeks with an initial max requirement of...
The Federal Government has legislated emissions reductions of 43% below 2005 levels by 2030. Sourcing electricity from renewable technologies is fundamental to meeting this, with a much-publicised target of 82% renewables in the grid by 2030 – up from a current value of 38% over the last year. Fortunately, the...
"While the rise is small, it shows we cannot just assume prices will continue their fall and eventually reach pre-pandemic levels."
Our Domestic retail price cap predictor forecasts Ofgem’s default tariff cap and examines the key drivers affecting the level of the cap, and – in turn – household energy bills. It uses our in-house modelling of non-energy costs – such as policy levies and network costs – alongside a view...
On 9 October 2023, 1pm (market time), the dispatch of the new Very Fast (VF) FCAS market in the NEM will commence and will add two new markets for contingency FCAS, Raise 1 (R1) and Lower 1 (L1). AEMO has released a final industry go-live plan to keep track of...
"Many believe such support could be the much-needed lifeline for millions of people who are struggling to pay their energy bills."
Energy storage and flexibility
A key part of the business case for grid-scale standalone batteries is the arbitrage opportunity between low daytime wholesale prices (when renewable energy generation from solar is plentiful) and high evening prices (when the sun goes down and household demand ramps up quickly). The share of battery revenue coming from...
Energy storage and flexibility
The focus of batteries is constantly adjusting to reflect ‘where the money is at’. Various quarters have trends, and others have events that swing momentum. With FCAS enablement in Q2 this year dropping to some of the lowest values since 2016, shifting the solar curve, or rather arbitrage, became the...
"The debate around the merits and continued validity of the cap has been compounded by the current cost-of-living crisis. While there is no one simple solution to high energy costs, there are steps that can be taken."
"As many, including energy regulator Ofgem have acknowledged, it is essential that the government explore alternative solutions, such as social tariffs, to ensure stability and affordability for consumers."
Following the release of our final price cap predictions for October, our Senior Consultant Kate Mulvany was interviewed on Radio 4’s Today Programme. She spoke on the upcoming cap, what bills could look like going through 2024 and what consumers need to consider when looking at new tariffs. Radio 4...
The latest round of Capacity Market auctions is underway following the publication of the auction parameters on 18 July, with the prequalification window subsequently opening on 26 July. In this blog, we explore some of the changes made to the rules and regulations of the scheme ahead of this year’s...
Energy storage and flexibility
On 3 August, at the request of the Australian Energy Market Operator (AEMO), the Australian Energy Market Commission (AEMC) initiated a rule change request proposing to “clarify the mandatory primary frequency response (PFR) obligations of scheduled bidirectional plant (i.e. batteries with a capacity of 5MW and greater)”. One of the...
The Australia-Asia power line proposed by Sun Cable will connect a 17-20GW capacity solar plant to Darwin with an 800km High Voltage Direct Current (HVDC) transmission line, which then connects to Singapore via a 4,500km HVDC transmission subsea cable (Australia-Asia-powerlink). Expected to be operational by 2027, the $35 billion project has...
"The wholesale market remains the main driver of bills, and unfortunately there is no immediate prospect of prices there returning to historic averages."
This course runs across two days This course runs across two days. This short course is indispensable for those wanting to understand the fundamentals of how Power Purchase Agreements (PPAs) and their variants, including Corporate Power Purchase Agreements (CPPAs), are an essential contracting route for many renewable electricity generators. We...
With the Default Tariff Cap falling by 17% compared to the Energy Price Guarantee (EPG) at the start of the month, there has been a great deal of attention around the possible return of fixed tariffs for domestic consumers. Several fixed tariffs were indeed launched in recent weeks, representing a...
"Based on our current forecasts, customers are unlikely to lose out by taking a one-year fixed deal, however, it is doubtful these deals will result in significant savings, if any at all."
The Step Change scenario in the 2022 Integrated System Plan (ISP) is targeting 83% renewable energy generation in the NEM by 2030-31. By then, around 79GW of VRE resources (wind, utility solar, and distributed PV) is expected to have been installed to help replace the 14GW capacity of synchronous generation...
Energy storage and flexibility
The NSW Electricity Infrastructure Roadmap’s second competitive tender round for firming infrastructure commenced on 3 April 2023. This second round is focused on supporting LTESA firming supply proponents, where ‘the LTES Operator will have the option to access a capped annuity payment as a top-up to the operating revenues of...
“It is of utmost importance that the government and other decision-makers fully comprehend the urgent and pressing need for continued investment in renewable energy sources and innovative solutions."
"While typical household predictions may provide some insight for consumers, households are still facing the challenge of bills that are well above historic levels."
Prior to the introduction of the July price cap, we released new forecasts that showed the price cap will only fall slightly over the winter, and are likely to remain above historic levels. Dr Craig Lowrey, a Principle Consultant at Cornwall Insight spoke on the urgency to review the price...
"With the stakes higher than ever, the report underscores the critical role that financial incentives play in driving innovation and accelerating the development of long-duration energy storage technologies."
Energy storage and flexibility
When project developers evaluate the potential profits for a new battery project in the NEM, one key variable being considered is the maximum allowable cycling rate of the battery. Cycling at higher rates can enable more arbitrage profits to be earned, but every MWh of energy that passes through the...
Along with the retirement of coal/gas power plants in the NEM, long-duration energy storage systems (LDESS), often exceeding 8 hours of storage, are becoming more crucial in transitioning to a more sustainable and renewable energy future. LDESS technologies, such as battery storage systems (BESS), thermal energy storage systems (TESS), compressed...
"With the anticipated rise in exports to Victoria, alongside the retirement of Eraring and the delayed energy transition targets in NSW, there exists the possibility of a considerable uptick in prices and potentially enhanced profitability, giving coal generators a reason to stay in the game."
On 29 May 2023, AEMO published a conclusions report on the VNI West Project. According to the report, option 5A (a variant of AEMO’s preferred option in a previous consultation paper) is preferred for VNI West. In option 5A, the transmission line crosses the Murray River north of Kerang (Wamba...
