Batteries’ $1m payday from high power prices in heatwave
As sweltering South Australians cranked up the aircon last week, the operators of the state’s big batteries celebrated an early Christmas present.
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South Australia’s three grid-scale batteries made about $1 million during last week’s heatwave, benefiting from arbitrage not possible from other energy sources, a market analyst estimates.
The batteries charge up when prices are low and sell power when prices are high — and last week the prices hit extraordinarily high peaks.
The event is likely to encourage more batteries to be built, said Marija Petkovic of advisory firm Energy Synapse.
On December 19, wholesale spot prices hit the market ceiling of $14,700/MWh from 6:30pm to 7:30pm, compared to this year’s average so far of $110/MWh, when wind and solar output was low and expensive gas and diesel were needed to satisfy demand.
“Being both dispatchable and fast responding, batteries were well placed to take advantage of this volatility in pricing,” Ms Petkovic said.
She estimated Neoen’s battery at Jamestown and the new Lake Bonney battery in the South-East each made nearly $450,000 that day and the next when prices also peaked, while the Dalyrmple battery on Yorke Peninsula made about $100,000.
The revenue includes the cost of charging the batteries and excludes ancillary service earnings.
Separate analysis by Paul McArdle of consultants global-roam estimated the Lake Bonney battery generated power throughout the December 19 peak while Hornsdale stopped short of the full period and Dalrymple provided power for the first half.
The Australian Energy Market Operator expects prices to peak again on Friday evening.