Dispatch Model Overview

GB-specific dispatch optimization and market participation strategies

Markets

In GB we model the following markets:

  • Day-ahead market: Hourly energy market, solved in a single step using perfect foresight
  • Intraday market: Half-hourly energy market solved sequentially with a 2-hour rolling horizon with imperfect foresight. We use day-ahead prices as forecasted intraday prices
  • Dynamic frequency response: 4-hour EFA block markets for dynamic frequency response services with day-ahead procurement
  • Reserve services: Fast and Quick reserve markets with half-hourly granularity and day-ahead procurement
  • Balancing Mechanism (BM): Bids and Offers are issued by the system operator in real-time to balance supply and demand and manage system constraints

Multi-market Optimization

Day-ahead step

The dispatch model solves firstly in the ‘day-ahead’ step, contracting volume in the day-ahead, dynamic frequency response, and reserve markets. It has limited visibility of potential Balancing Mechanism revenues and can reserve headroom/footroom for particularly lucrative periods.

Intraday step

The dispatch model then solves sequentially in the ‘intraday’ step, with a 2-hour rolling horizon and imperfect foresight.

Balancing Mechanism step

Finally, the dispatch model simulates participation in the Balancing Mechanism in real-time. The battery can provide Bids or Offers based on dispatch rates determined from our Fundamentals Model, which looks at system constraints in each transmission zone. The model also accounts for the % chance of being in-merit based on historical data. The battery is able to rebalance its state-of-charge, due to providing Bids and Offers, in the intraday market.

Network Charges

Transmission Network Use of System (TNUoS)

The model calculates TNUoS revenues differently based on connection type:

Distribution-Connected Batteries (≤100MW)

  • Uses embedded export tariffs based on GSP region
  • Applies triad de-rating factor based on battery capacity
  • De-rating factor calculated using linear formula: derating = TRIAD_DERATING_SLOPE * capacity + TRIAD_DERATING_INTERCEPT
  • Revenue calculated as: tariff × derating × capacity

Transmission-Connected Batteries (or >100MW)

  • Uses wider generation TNUoS tariffs based on generation zone
  • Calculates Annual Load Factor (ALF) based on battery cycling patterns
  • For new assets, uses a weighted average of operational ALF and nominal ALF (0.0389)
  • For existing assets, uses historical operational data
  • Accounts for partial years of operation with pro-rated calculations
  • Revenue calculated as: tariff × ALF × capacity

Note: TNUoS revenues are only applied in forecast mode and are distributed evenly across all periods in the year.

Capacity Market

The model calculates Capacity Market revenues using the following approach:

  • Uses forecast clearing prices from the Capacity Expansion Model
  • Applies duration-specific de-rating factors based on battery duration
  • For batteries with non-standard durations, finds the closest standard duration for de-rating
  • De-rating factors are adjusted annually based on regulatory changes
  • Revenue calculated as: clearing_price × de-rating_factor × capacity
  • Applies inflation adjustment to convert from nominal to real prices

Note: Capacity Market revenues are only applied in forecast mode and are distributed evenly across all periods in the year.

Revenue calibration

The model applies calibration factors to different revenue streams:

  • Based on historical performance of assets in the GB market compared to running the dispatch model historically
  • Adjusted for different scenarios: central=80%, high=85%, low=75%
  • This accounts for factors that we don’t model like battery unavailability, fully imperfect foresight, and no guarantee of winning a frequency response contract

Special considerations

Big BESS revenue derating

For large battery systems (>300MW) we apply additional derating factors to certain revenue streams:

  • Ramp rates are imposed for all charge and discharge actions
  • Ancillary service contracts are capped at 100MW
  • Balancing Mechanism revenues are derated based on rated power capacity
  • This is based on historical analysis of large asset performance in GB
  • It reflects limited opportunities for very large assets

Distribution Use of System (DUoS)

  • These are charges for using the distribution network
  • Time-of-use pricing with red, amber, and green bands
  • Regional variations based on Distribution Network Operator (DNO)
  • Users can use the forecast builder to add their own specific DUoS tariffs
  • The model includes detailed DUoS optimization to minimize these charges

Standalone solar revenue streams

Contracts for Difference (CfD)

A government scheme to support low-carbon electricity generation:

  • Generators receive a fixed “strike price” for their electricity
  • Difference payments made when market price is below strike price
  • 15-year contracts for projects commissioning before 2028, 20-year contracts thereafter

The model calculates CfD revenue for renewable assets including:

  • Strike price revenue
  • Difference payments
  • Revenue lost during negative price periods
  • Merchant tail after CfD expiry

Renewable Energy Guarantees of Origin (REGOs)

Certificates that prove electricity was generated from renewable sources:

  • Additional revenue stream for renewable generators
  • REGO prices modeled based on historical and forecast values