Modo presentation at Flex Provider roundtable

1. Alex Done Head of Research alex@modo.energy Preparing for short-term, dynamic flex markets Learnings from grid-scale flex
2. Quentin Scrimshire CEO, Modo Energy We’ve launched a free plan. Go to modo.energy to see what all the fuss is about. Data is fundamental to the future energy system. Let’s build. 🚀
3. Power sector GB Power Sector Flex Energy storage We’ve launched a free plan. Go to modo.energy to see what all the fuss is about. Designed for owners and operators of energy storage in GB
4. Alex Done Head of Research alex@modo.energy 2019 B’ham + London 11 teammates 600+ users We’ve launched a free plan. Go to modo.energy to see what all the fuss is about.
5. ~40% of batteries in GB are owned/operated by subscribers to our paid service. We’ve launched a free plan. Go to modo.energy to see what all the fuss is about.
6. 1 What’s changed - EBGL?
7. We’ve launched a free plan. Go to modo.energy to see what all the fuss is about. Energy Balancing Guideline (EBGL) • EU regulation (2017) • Implement by 2023 • Rules to harmonize balancing markets
8. We’ve launched a free plan. Go to modo.energy to see what all the fuss is about. 2 specific rules have taken centre stage for TSO services... Article 6(4) All balancing products shall be procured using pay-as-clear pricing. Why? Encourage participants to bid at their marginal cost. Article 6(9) All balancing capacity shall be produced less than 1 day before delivery. Why? Avoid paying for services we don’t need.
9. 2 What have we learned from TSO services?
10. High service costs in DA STOR Provider behaviour has been difficult to predict To reduce spend, the ESO won’t ‘overbuy’ STOR Highly volatile market (and high service cost!) £72k/day £28k/day 0 10 20 30 40 50 60 70 80 Current Market Efficient market (modelled by Modo) Avg. daily spend (£k) Average daily STOR spend
11. Penny bids in weekly FFR Wild price swings Dynamic, symmetric service clearing below asymmetric static service (!?) 0 2 4 6 8 10 12 14 Clearing price (£/MW/h) Weekly FFR prices (Aug 2020) DLH LFS
12. High prices in Dynamic Containment Consistently undersupplied market Price cap set by ESO Great news for BESS… 0 2 4 6 8 10 12 14 16 18 0 200 400 600 800 1000 1200 1400 Oct 2020 Jan 2021 Apr 2021 Jul 2021 Market price (£/MW/h) Volume (MW) DC market summary Volume Accepted Requirement Availability Fee
13. We’ve launched a free plan. Go to modo.energy to see what all the fuss is about. Key takeaways • Be wary of complex auctions. • Auction design – impacts price • Designing new services is hard - getting this right first time is unrealistic.
14. 3 The end of long term contracts
15. We’ve launched a free plan. Go to modo.energy to see what all the fuss is about. Long term Short term The move to real-time procurement Max contract length One-off Real- time Auction frequency 2017 2018 2019 2019 2020 2021 Future? EFR FFR FFR FFR phase 2 DC DC, DR, DM DC, DR, DM 4y 2y 1m 1w 1d 4h 30m One off Monthly Monthly Weekly Daily Daily Daily Simple Complex Operational complexity
16. Floor prices are becoming more commonplace (and attractive) to provide owners with long-term revenue stability -£1,000 £1,000 £3,000 £5,000 £7,000 £9,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Monthly revenues (£/MW) Indicative monthly floor prices Revenues (net optimiser cut) Top-up Upside payment Floor price
17. We’ve launched a free plan. Go to modo.energy to see what all the fuss is about. Key takeaways • Long term contracts are gone for good • The role of the optimiser is more important than ever. • In the new world of short-term, real-time markets, floor prices offer a solution.
18. Alex Done Head of Research alex@modo.energy Preparing for short-term, dynamic flex markets Learnings from grid-scale flex