In Australia's market, batteries are paid for hours, not megawatts, and the next projects show it
Victoria Shinder1 min readTwo Australian storage items published on 6 October fit together.
What the market paid. NEMPulse's estimate of third-quarter revenue for the 59 batteries in the National Electricity Market splits earnings by duration class. Per megawatt, 4-hour-plus systems earned AU$22,000 over the quarter, 2-hour systems AU$8,118 and 1-hour systems AU$4,818. Energy arbitrage made up 97% of all revenue, with frequency control services (FCAS) at 2%.
What is being built. Reported the same day: Origin Energy has referred Eraring BESS North for environmental assessment, about 500 MW with about 4,942 MWh, a ratio of roughly ten hours. Its existing Eraring battery is being extended the same way: stage 3 converts the first 460 MW stage from 2-hour to 4-hour duration. Eraring BESS was also the quarter's top individual earner at AU$8.82 million.
What the numbers do and do not show. The duration ranking is not perfectly ordered: 3-hour systems earned the least, AU$2,418 per MW, so duration alone does not explain the spread, and NEMPulse notes that individual results reflect contracts and operating constraints as well as trading. The quarter's data also show how much the fleet left on the table: on the 92 days covered by AEMO's public forecasts it realised 52% of the perfect-foresight benchmark, against 69% that NEMPulse modelled as achievable from those forecasts alone.
The reading. When 97% of revenue comes from shifting energy in time, the amount of energy a battery can shift is what the market pays for. The largest new project in this week's news is sized accordingly.