The UK’s energy storage owners and operators must be “ruthlessly entrepreneurial” to navigate current Energy Market Reform conversations and prepare for the rapid growth expected in the near future.
This is according to energy data platform Origami whose latest report Trading Power in a Volatile Market recognises the need for energy storage owners to update their energy trading strategies and adopt digital technologies to grasp the change in the direction of the market.
Project owners are no longer able to stick to one deal or route for 10 to 20 years, the report indicates. With this, the changing market requires a degree of flexibility that does not currently exist. This is underpinned by new digital operating systems.
These systems must provide a combination of real-time power market data, showing where value exists both now and in the future, as well as the advanced infrastructure that enables operators to dispatch power into the right value pools at short notice.
“Businesses with energy storage assets and portfolios can’t afford to waste time in gearing up for the future energy market. They must not hesitate to boost their own capabilities now to ensure that they are calling the shots on how their trading strategies evolve in the long term,” said Dan Hodges, head of commercial at Origami.
“The storage market is full of entrepreneurs, and we will need this pioneering – sometimes ruthless – mindset to prepare for and drive forward the changes the industry needs to see, while the UK continues to debate its long-term energy strategy.”
To support storage owners and operators in navigating the market, Origami has outlined several changes that can be made. This includes:
- Creating crystal clear accountability and responsibility for energy trading, whether investing in your own trading systems, or working with third parties.
- Clarifying exactly what is needed from energy traders, including advanced systems encompassing real-time data, flexibility and power dispatch infrastructure.
- Building a thorough understanding of how energy markets are evolving – including changing value pools – to increase leverage in negotiations.
- Not sacrificing long-term value for short-term wins. Companies must assess whether participation in short-term contracts may compromise the lifespan of physical assets.
- Investing in the independent digital infrastructure that will give the agility to create opportunities by closely managing asset portfolios, supporting growth across asset classes and geographies and driving investment with crystal clear management, group reporting and insights.
The energy storage market is expected to grow in the coming years as renewable energy projects mature and become operational. However, an increasingly competitive market could reduce investor appetite for the sector. Otimisation and stacking value must therefore be utilised to maintain investment levels.
This is according to a GridBeyond and Thrive Renewables white paper released in August, which indicated that stacking value and optimisation are a crucial component in maintaining attractive investment opportunities in battery energy storage.
