UK battery storage revenues from new dynamic frequency regulation services won’t take long to fall

LinkedIn
Twitter
Reddit
Facebook
Email
The 40MW Arlington battery storage project, which is among the assets in Habitat Energy’s optimisation portfolio. Image: Habitat Energy.

By the end of 2022, the volume of installed batteries in the UK is set to outstrip the demand from frequency services, marking a key tipping point for Dynamic Containment (DC).

Up until now, the market for DC which was only launched late last year has been undersubscribed, making it one of the most profitable for battery storage optimisers in Britain, Mike Ryan, commercial director at Habitat Energy – an optimisation company with a large number of battery assets in its portfolio – explained in a webinar for our sister site Current± last week, part of the site’s Current± Briefings series, called ‘The future of Dynamic Containment’.

This has allowed companies to capture revenue of close to the cap of £17 (US$23.76) /MW/hr in the market fairly consistently. As the volume of installed battery capacity outstrips demand from DC and other frequency services like Firm Frequency Response (FFR), attention will likely turn to the merchant market.

As such, forecast revenue is becoming increasingly important, with the volatility of wholesale power prices due to intermittent generation from renewable energy increasing, offering a significant opportunity to flexibility providers. Prices will likely fall in the DC auctions, and then start tracking closely to merchant prices said Ryan.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

Not ready to commit yet?
  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

National Grid ESO is set to introduce two further Dynamic services to help manage this volatility, with pre-fault services Dynamic Moderation and Dynamic Regulation in the works currently. While not set in stone, these are likely to be smaller than DC which is set to have a total capacity of 1,400MW. For Moderation this is likely to be 300-500MW and for Regulation 400-600MW.

Given the size of these mechanisms therefore, and the growth in the battery market, they are unlikely to have such a significant impact on the market, or offer such large returns. For Regulation in particular, Ryan suggested that the price batteries would have to bid in at to make commercial sense for the asset owners would likely lead to them being rejected.

There is the possibility of stacking revenue streams going forwards to maximise an asset’s potential, utilising a combination of Dynamic services, FFR and others.

“National Grid have always stated they’re very keen to make these services stackable, I think people just need to be conscious of what stackable means,” said Ryan, highlighting that an asset cannot do three things at once.

“So stackable in that one asset could do all of the services simultaneously, but not stackable in terms of you can have one megawatt of active power, delivering multiple active power services at the same time.”

This story first appeared on Current±, where you can also find out about past and future Current± Briefings webinars. The full video of Current± Briefings: The future of Dynamic Containment will be available on the site in the coming days also.

Read Next

September 17, 2025
Europe-based BESS optimisation and flexibility providers Sympower and Suena have completed Series B1 and A fundraisings respectively.
September 10, 2025
Fidra Energy has secured £1 billion for the largest BESS in the UK, while EDF and Elements Green have agreed a toll for a 720MWh system.
Premium
September 9, 2025
Andrés Barberán, energy storage product manager at Fluence, emphasises that optimising battery energy storage system (BESS) performance means making decisions with the entire asset lifecycle in mind, not just immediate returns.
September 5, 2025
Energy-Storage.news proudly presents our sponsored webinar with Qcells + Geli, on modelling and realising maximum profits from commercial & industrial (C&I) battery storage systems.
Premium
September 5, 2025
ESN Premium speaks with Chris McKissack, CEO of developer Fullmark Energy, on issues affecting the US market today and the company’s transition from its legacy business model.

Most Popular

Email Newsletter