Why is a 2h system better than a 1H system?

Since the energy throughput required to provide ancillary services is relatively low, a 2h system has limited additional benefit (i.e. state of charge management) over a 1h system in terms of procuring revenues. Figure 1 (below) shows the revenues (£/MW) of three assets of different durations that took the exact same trading strategy in May 2021.

Are 2H batteries more profitable than 1H batteries?

So, while 2h assets are able to take greater advantage of high prices in wholesale markets than 1h assets, frequency response remained the most consistent revenue stream available for all batteries across this period. Figure 6 (below) shows (modelled) annualised BM revenues for BESS assets of different durations, using the following assumptions:

How much do 2H assets earn compared to 1H assets?

Source: Modo Energy. 2h assets are able to earn ~2x that of 1h assets in CM revenues (for contracts awarded in the same auction). On average, CM revenues make up 13% of income revenues for assets on the Modo Leaderboard. The CM auctions and results give some visibility around the duration of BESS assets being built.

What are energy storage technologies?

Informing the viable application of electricity storage technologies, including batteries and pumped hydro storage, with the latest data and analysis on costs and performance. Energy storage technologies, store energy either as electricity or heat/cold, so it can be used at a later time.

Where can energy storage be used for capacity services?

Markets are increasingly seeking energy storage for capacity services (including through capacity markets). Japan, Poland, the UK, Chile, the US Southwest, New York and Australia are new markets opening up these opportunities.

Does a 2h asset make more wholesale revenues than a 1H asset?

When comparing by duration, the 2h asset makes 69.9% more in wholesale revenues than the 1h asset.