About this Video

• Video Title: EP.245 Matt Grover on Battery Dispatch and Economics
• Channel: Aurora Energy Research
• Speakers: Hugo Battton, Matt Grover, James Ha
• Duration: 40:11

Introduction

This Energy Unplugged podcast episode discusses the economics and dispatch of grid-scale batteries in Australia's National Electricity Market (NEM). Matt Grover, Director of Energy Markets at Fluence, provides insights into battery revenue generation, market volatility, and future investment prospects.

Key Takeaways

• Australia's NEM is volatile: The NEM has a price cap of AU$17,500/MWh and can experience negative prices, creating significant opportunities for battery arbitrage.
• Battery revenue sources have shifted: Early battery revenue primarily came from ancillary services (FCAS). Currently, energy arbitrage is the dominant revenue source.
• Regional variation in battery returns: The profitability of battery projects significantly depends on their location within the NEM due to varying price dynamics and grid constraints.
• Future outlook for battery investments is positive: Factors like increasing negative pricing during periods of high renewable generation, widening daily price spreads, and the increasing impact of weather events on the power system are expected to sustain strong returns for battery investments.
• Advanced bidding software is crucial: Automated bidding systems are essential for optimizing battery performance and profitability in the volatile NEM market. Manual bidding is practically impossible due to the speed and complexity of the market.
• New contract types are emerging: Virtual battery contracts are gaining popularity, offering a way to convert volatile merchant prices into more stable revenue streams for both battery operators and offtakers.