How we helped a client assess the value of adding battery storage to an existing generation portfolio.
We were commissioned to analyse the incremental value of adding battery storage to a client’s portfolio. This analysis was designed to show the benefits of adding battery storage to an existing portfolio, and in combination with other new assets, to assess the impact on the portfolio’s cashflow resilience.
The first phase of this work required us to model the revenue streams of the existing and pipeline assets in the client’s portfolio across wholesale and balancing markets. We modelled the assets stochastically under a range of scenarios to provide best estimates, year-to-year volatility and long-term variability in returns. Once this baseline was established we could start incrementally adding battery storage assets to measure the impact on the portfolio.
Each additional MW of battery storage has a different impact on both absolute expected profitability and the range of potential outcomes. We considered several different battery configurations (capacity and durations) to show how these would impact revenue, in order to assess the optimal portfolio mix across the scenarios. Our team presented the results using a range of portfolio analysis methods to quantify the risk and reward of each portfolio package. We used the Efficient Frontier technique to show the risk vs return spectrum for the different portfolio options.
The client was presented with easy to digest visuals, alongside the underlying data, to decide what its optimal portfolio would be under different risk/return appetites.
How we can help
We can help our clients with a wide range of issues from whole system modelling to individual power plant and policy impact analysis.
Strategic advice aimed at maximising the benefits and minimising the risks associated with the Capacity Market and Contracts for Difference.
We advise on the optimal dispatch of assets within the wholesale market, forward planning of maintenance activities and valuation of commercial upgrades to plant.
We provide detailed forecasts of the GB and Irish power markets, using our EnVision modelling framework. This can provide both short-term and long-term forecasts of all key system metrics, from system wide to individual assets.
We work extensively in the Irish market, providing market modelling and analysis to investors, generation owners and governments.
Enact is an advanced data integration and analytics platform for the GB electricity short-term markets, allowing power traders to make more informed decisions and analysts to benchmark their asset's performance.
Our understanding of market dynamics and modelling experience allow us to offer evidence-based recommendations on complex policy and regulatory issues that allow fully informed decision-making.
We combine bottom-up unit-level modelling with market and policy insights to quantify the value and understand the risk associated with any generation asset.