Habitat Energy is currently managing 100MWh of battery storage in National Grid’s three week “Reserve from Storage” ancillary service pathfinder, more than any other participant.
Reserve from Storage is designed to enable battery storage to provide upward and downward reserve within the Balancing Mechanism. Traditionally this reserve has been held on large, carbon intensive assets and some pumped hydro. It is one of a number of National Grid ESO initiatives to improve system stability and operability by taking fullest possible advantage of the fast response times of the UK’s growing fleet of grid-scale battery storage.
Other changes to ancillary service market design will also benefit storage: Firm Frequency Response (FFR) is being phased out and replaced with a new suite of response products. The first of these, Dynamic Containment, launches on 1st October and Habitat Energy will be one of the first to offer this new revenue stream to our clients. When Reserve from Storage is looked at alongside Optional Downward Flexibility Management (ODFM), another service Habitat Energy is already participating in, it is clear that the direction of travel for these services is one which favours battery storage.
Mike Ryan, Habitat Energy’s Commercial Director said “We are delighted to have participated in the Reserve from Storage trial, and fully supportive of National Grid ESO’s efforts to refine ancillary service market designs to unlock the full potential impact of energy storage. Habitat Energy’s algorithmic trading tools and experienced trading team have again performed exceptionally well”.
Commercially the trial was a success too, with attractive levels of revenue generated for the asset owner. “While we always recommend that investors in battery storage view wholesale and balancing markets as the ‘base case’ revenue streams, as an optimiser we recognise the attractive upside that ancillary service contracts provide for certain periods of time. It is precisely this flexibility in the revenue model and the wide range of valuable services that battery storage can provide that makes it such an attractive investment opportunity” said Phil Robinson, co-founder of Habitat Energy.