How does an aggregator work with a battery energy storage system?
“A battery energy storage system (BESS) can be used to help balance the grid, by storing and discharging energy when its needed, improving our energy resilience. As we move towards increasing the number of renewables in our power generation mix, the ability to balance this with flexibility elsewhere on the power system will become increasingly important.
Providing grid balancing service is therefore of value and can be a revenue stream as the National Grid ESO will pay for it. You can find out more about this in our article quantifying the benefits of BESS here.
National Grid buys energy in large blocks, typically by the megawatt (MW). If your BESS provides less than 1MW, it can’t individually supply the grid. An aggregator is a way for several smaller assets in the same area to group together to sell grid balancing solutions.
The aggregator is the interface to National Grid ESO and your route to market. They also calculate how much revenue is paid to the owners of each asset. In this way, aggregation also provides a degree of security to National Grid ESO – if there is an issue with one of the assets in your group, other assets can step up and provide that energy, ensuring there is no disruption of service. After all, there is strength in numbers.”
How long am I signed up for?
“Different aggregators offer different deals, a bit like mortgages. So, you might sign up for a fixed term and a fixed rate or go for a variable rate which will change depending on energy prices. Two-year contracts are typical, but we have seen 10-year contracts before. At Connected Energy we would recommend considering the contract term and working out what suits you. At the moment, there are some beneficial terms on offer.
Either way, you are not locked into one aggregator forever. Each aggregator has their own control software or hardware that is attached to Connected Energy’s BESS, but they can be swapped out if you decide to pivot from one aggregator to another in the future. Connected Energy designs its BESS to be aggregator-agnostic, making it relatively easy to swap if required.”
How do I get paid from an aggregator?
“You’re providing a grid balancing service, so you get paid for availability. You are tendering your availability to the aggregator and the aggregator pools the availability of local assets for the market. The aggregator then calculates your share of the revenue, and you receive payment once a month, retroactively.”
What is the benefit to our customers?