Batteries reshape the daytime-to-evening spread
Growing grid-scale and household batteries increasingly absorbed daytime renewable output and shifted energy into the evening peak as renewable penetration and price patterns changed.
Permanent case linkYour task
Reconstruct realised revenue, separate energy and FCAS value, then test whether a four-hour augmentation is justified.
Your role
Commercial manager for a two-hour NEM battery
Practice data & worked solution
A feasible six-hour battery schedule
Original synthetic hourly teaching data, not NEM observations. Prices are A$/MWh; each row lasts one hour. AC import/export limit: 50 MW. Stored-energy limit: 100 MWh. Initial stored energy: zero. Charge and discharge efficiencies: 95% each. Degradation allowance: A$8 per exported MWh. No auxiliaries, network charges, FCAS or fixed costs are included.
| Hour | Price AUD per MWh | Charge MW | Discharge MW |
|---|---|---|---|
| 1 | 20 | 50 | 0 |
| 2 | 30 | 50 | 0 |
| 3 | 50 | 0 | 0 |
| 4 | 120 | 0 | 45 |
| 5 | 160 | 0 | 45.25 |
| 6 | 40 | 0 | 0 |
Your analysis
- Build a stored-energy balance for every row. Confirm the 50 MW power and 100 MWh energy limits, and reconcile the ending inventory.
- Calculate imported/exported energy, charging cost, discharge receipts, gross energy margin and contribution after the degradation allowance.
- Reduce the hour-5 price from A$160 to A$100/MWh. Recalculate the contribution for the same schedule, then explain why an optimised operating schedule might change.
Worked solution
Energy and feasibility
Stored energy after each hour is 47.5, 95, 95, approximately 47.632, 0 and 0 MWh. Use ΔE = 0.95 × charge MW × 1 h − discharge MW × 1 h / 0.95. Imports are 100 MWh and exports 90.25 MWh, so the complete cycle efficiency is 90.25%. Maximum stored energy is 95 MWh; every import/export rate is within 50 MW.
Cash-flow waterfall
Charging cost is 50 × 20 + 50 × 30 = A$2,500. Discharge receipts are 45 × 120 + 45.25 × 160 = A$12,640. Gross energy margin is A$10,140. The degradation allowance is 90.25 × 8 = A$722, leaving A$9,418 before the other excluded costs. This contribution is not project profit or investment return.
Lower-spread scenario
The hour-5 price reduction removes 45.25 × 60 = A$2,715. Contribution falls to A$6,703 for the fixed schedule. This is a sensitivity, not a re-optimisation. An operational strategy would consider alternative timing, forecasts, available services, constraints and the value of ending inventory. Do not extrapolate this six-hour contribution into annual profit.
Review your response
- Physical balance: losses applied once at the stated boundaries; every interval is feasible and terminal inventory reconciles.
- Commercial balance: purchased and exported quantities differ; receipts, margin and contribution are kept separate.
- Counterfactual: the price sensitivity is correct and described as fixed-schedule analysis, not an optimum.
- Recommendation: explain which operating, market and cost evidence is needed before considering augmentation.
This checklist supports self-review. No tutor marking or independent credential is included.
Related topics 7
Sources & evidence
QED report and workbook, dispatch and FCAS prices, availability, state of charge, losses and degradation cost
AEMO Quarterly Energy Dynamics