The capacity market is rapidly becoming “outdated” after the latest auction failed to secure capacity and value for new technologies like energy storage, which is now in “a state of flux” following changes to de-rating factors.
The vast majority of battery projects set to compete in the upcoming Capacity Market (CM) auctions will face significantly decreased de-rating factors after it emerged that most projects are still set to use either 30 minute or one hour duration batteries.
Changes to the de-rating factors for battery storage projects competing in the Capacity Market (CM) will push the sector towards longer-duration batteries, while potentially sparking a shift towards energy arbitrage as a source of revenue for shorter duration applications.
UK renewables and battery developer Anesco has warned that the looming de-rating of battery storage in the Capacity Market risks scaring investors away from the technology.
Anesco is investigating how it could adopt flow batteries into future projects instead of lithium as a response to growing uncertainty around the future of storage de-rating in the capacity market.