For the first time, batteries generated more than half of their total market revenue from the energy market in 2024 (70%). This is a significant shift, as FCAS markets had historically been the primary revenue stream for batteries in the NEM – yet their share of battery revenue has been on a steady decline since 2020.
Despite many new batteries coming online in the past two years, total FCAS market revenue has remained flat. This highlights the “shallow” nature of FCAS markets and increased competition as operational battery capacity grows. For instance, while the total operational capacity of batteries in the 6-sec and slower Raise Contingency markets now exceeds 800 MW, AEMO typically procures only 600–700 MW across all generation assets in these markets.
Still, battery market revenues in the NEM have surged. In 2024, their total market revenues grew by 101% compared to 2023, with more than $161 million generated in the energy market alone.
As anticipated by many experts, this confirms an important change in the distribution of battery market revenues between energy and FCAS. However, this also presents challenges for developers and operators, as energy market revenues are highly sensitive to fluctuating electricity prices and the complexities of energy market trading.
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