Thanks Kasim. I wonder if you could offer thoughts on the economics of the new 19 GWh BESS in the UAE. I think it can only discharge @ 1 GW (?). How do they get big enough price spreads to turn a profit?
Hi Thomas - sure. In short, they probably don't. There isn't a deregulated energy market in the UAE, so they aren't profiting off of real-time price signals like in the US and Europe. This project might be more akin to utility-scale pilots in the US, where the utility recognizes the broader value BESS can provide to the grid without needing to meet a required internal rate of return from wholesale market participation.
Well, some might call it a vanity project a la The Line. Others might call it a helpful pilot to demonstrate the possibility of 24x7 green energy. Personally I think most of the value in this project lies in the intangibles.
It certainly could charge/discharge for 1 hour of the day and trade CfD later - suppose it depends on your desired risk/return profile.
Thanks Kasim. I wonder if you could offer thoughts on the economics of the new 19 GWh BESS in the UAE. I think it can only discharge @ 1 GW (?). How do they get big enough price spreads to turn a profit?
Hi Thomas - sure. In short, they probably don't. There isn't a deregulated energy market in the UAE, so they aren't profiting off of real-time price signals like in the US and Europe. This project might be more akin to utility-scale pilots in the US, where the utility recognizes the broader value BESS can provide to the grid without needing to meet a required internal rate of return from wholesale market participation.
What would be the broader value in this case? 19GWh is big for an experiment, my instinct tells me it must somehow make financial sense.
I hear a lot of rhetoric about the importance of deep storage, but it’s just not reflected by the market, as shown by you, here, and others.
What about risk markets? Could it charge/discharge like a 1h battery, then trade CfD for the rest of the day?
Well, some might call it a vanity project a la The Line. Others might call it a helpful pilot to demonstrate the possibility of 24x7 green energy. Personally I think most of the value in this project lies in the intangibles.
It certainly could charge/discharge for 1 hour of the day and trade CfD later - suppose it depends on your desired risk/return profile.