The Curious Case of Batteries Flip-Flopping

This technical report examines the challenges faced by flexible assets, particularly batteries, in Great Britain's electricity market. It outlines how the current national wholesale market design contributes to inefficiencies, leading to a phenomenon termed 'flip-flopping.' This occurs when batteries are instructed to reverse their intended output due to transmission constraints, resulting in additional costs for consumers. The report highlights that 59% of actions taken by the system operator to address transmission constraints involve reversing the batteries' intended discharge actions. It discusses the implications of these inefficiencies, including increased congestion costs and the potential need for more transmission investment. The report also suggests that a shift to a zonal market could provide better price signals for flexible assets, thereby maximizing their value and minimizing costs for consumers. The findings are based on data collected from April to September 2024, illustrating the pressing need for market reform to optimize the use of flexible resources in the energy system.