RWTH Aachen and enspired are developing a battery index to equip the storage industry with a tool that can benchmark market performance.
Together with ISEA (Institute for Power Electronics and Electrical Devices) of RWTH Aachen University, enspired is developing a battery index for the German market that will transparently map out the revenue potential for large-scale storage systems in grid services. Currently still under development, the index will be finalized in the coming months. Jonas Brucksch and Jonas van Ouwerkerk of RWTH Aachen University are the principal developers on the project, while enspired contributes the operational trading knowledge necessary to build the index as closely as possible to real-life market situations.
On one side, the battery index covers the spot markets, including the day-ahead and intraday auctions as well as intraday continuous trading. On the other side, it focuses on the balancing markets FCR (Frequency Containment Reserve) and aFRR (automatic Frequency Restoration Reserve). The index aims to increase market transparency by providing a basis for investors, project developers, and traders to better evaluate potential revenues. It facilitates comparability but is not intended to reflect the actual maximum achievable cross-market optimization result. Rather, the index is designed so simply that it is easily comprehensible and usable for calculations by all users. The ultimate goal is to publish all calculations in an Excel-based spreadsheet format once the battery index reaches its more sophisticated release state.
“The main motivation in all that we do is to combat the climate crisis, and the battery market is very important for that. We need batteries to balance grid fluctuations, and the main issue at the moment is that the market matures but lacks transparency. Together with enspired, we can merge the technical with the trading expertise to create a high-quality battery index that will solve this problem.”
The methodology for the battery index consists of four phases. In phase 1, the single market revenues are calculated and combined by simple weighting. This step neglects potential conflicts between market designs but gives an indication of feasible market allocation. In phase 2, additional boundaries will be implemented to better align the tool with real-world applications.
However, it is only in phase 3 that the battery index will reach the required quality for comparing trading products and cross-market revenues. This is achieved by incorporating different market designs and possible trading strategies. Finally, phase 4 validates the index with a real battery asset. Currently, 1- and 2-hour systems are considered, each with a limit of one or two equivalent full cycles per day. In future versions of the battery index, those parameters will be flexibilized. You can find the current development status (updated weekly) of the battery index here.
“At present, there are no public data sources to verify what a battery could have achieved in the markets last month, last week, or yesterday. As one of the most credible institutions for battery technology, RWTH Aachen is the perfect partner to change this with. They integrate all the fundamentals, understand our perspective as an optimizer, and even have their own battery on-site to validate results with a real asset. The index will be highly valuable for the industry because it enables the benchmarking of business cases. Therefore, it is important that the tool is developed by an independent party without a commercial interest in steering it in a certain direction.”
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