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Gresham House Energy Storage says UK battery storage market looking brighter

a control room at national grid eso

Gresham House Energy Storage’s share price has been weak since its half-year results, when it revealed that low utilisation of batteries by National Grid ESO (ESO) in the power grid’s balancing mechanism was affecting the entire Great British battery energy storage industry.

ESO hosted an event on 16 October called ‘Enhancing Energy Storage’ to provide clarity on the system improvement plans in the balancing mechanism. Gresham House Energy Storage says that ESO is taking some important positive steps to remove the limitations to battery storage use to a large degree by the end of 2023, with further improvements due in 2024 (apologies this is thick with industry jargon):

  • Launch of the ESO’s new IT system, Open Balancing Platform (OBP) with a new algorithm, the Bulk Dispatch Operator (BDO), is now set for 12 December 2023 (previously 15 December 2023).
  • The BDO will automate the aggregation of multiple BESS to enable their use in the Balancing Mechanism. Of the ESO initiatives, this is expected to have the greatest impact on the BESS utilisation.
  • Fast Dispatch will go live in Spring 2024 to allow the use of BESS for more rapid, marginal actions.
  • The 15-minute input parameter (limiting BESS actions to 15 minutes) is expected to be made flexible by the end of 2024. ESO will run trials following the launch of OBP and BDO in December 2023 to drive further usage of storage assets for reserve requirements in the near term.
  • The launch of Balancing Reserve (March 2024) and Quick Reserve (Summer 2024) services will provide further system flexibility for the ESO and offer BESS additional revenue opportunities. This incremental revenue can be combined with existing services and the BM at any one time.

Ben Guest, fund manager of Gresham House Energy Storage, said:

“We are grateful to ESO for its commitments to improve utilisation of batteries and pleased to see the release of their new system brought forward. We continue to support and engage with ESO on the implementation of their workflow. As renewable generation increases, ESO needs batteries to ensure its flexibility requirements are met, as well as to meet its publicly stated goal of being able to operate a carbon-free grid by 2025. We are encouraged that ESO’s prime incentive is to make these system improvements to meet its own objectives, and not simply to accommodate BESS operators. Separately, we are pleased to see ESO progress also being made to unlock grid connection bottlenecks. These were discussed at ESO’s separate event in London covering the prioritisation and acceleration of grid connection dates for new BESS projects, following the recent Government announcement.”

[QD comment: It will take a while for this to feed through into revenues for these companies and there is no way of telling how big an impact this wiill have – it should at least be an improvement. It still seems daft to me that the company that is least exposed to this – Gore Street Energy Storage – is the cheapest of the three battery storage funds.]

GRID : Gresham House Energy Storage says UK battery storage market looking brighter

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