FCAS revenues from batteries increase by 25%

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According to the latest research from Cornwall Insight Australia, batteries in Australia are increasing their revenue through Frequency Control Ancillary Services (FCAS).

The proportion of revenues delivered from the Frequency Control Ancillary Services (FCAS) raise six-second services, for Ballarat, HPR, and Lake Bonney were up on CY19 levels by 25, 16, and 22 percentage points, respectively.

The total revenue for those assets was also up by 10%, 61% and 174%, respectively (Lake Bonney was pro-rated as CY19 assumed operation for only November and December 2019). Dalrymple revenues were up by more than 230% in CY20 compared to CY19.

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Ben Cerini Principal Consultant Cornwall Insight Australia, said: “In CY20, on a $/MW and $/MWh installed basis, Dalrymple was the best performer returning more than $575,000 per MW installed and over $2 million on a $/MWh installed basis. Ballarat and Lake Bonney returned $210,000 and $230,000 per MWh installed respectively, while HPR returned more than $340,000 on an MWh installed basis.

“The nature and duration of contingency events will continue to drive significant variations in battery storage returns over the next decade. However, expected increases in energy spot market volatility will likely see a considerable increase in the percentage of revenues generated from the energy market.

“While new battery projects will bring increased supply to FCAS markets potentially driving prices lower, we can reasonably expect two things; similar levels of contingency events in the future and new spot markets for storage that will likely be implemented as part of the ESBs 2025 market design.

“FCAS continues to drive the majority of revenues for battery storage in the NEM (five active utility-scale battery storage projects are operating in the NEM: three in SA and two in VIC). However, given the forecast pipeline of future storage projects (with two 500MW+ projects having already been announced in 2021), it is unclear how the proportion of total revenues may change in the future.”