UK: Grid-forming batteries miss out in system stability tender as synchronous condensers, gas get contracts

AI Summary

• •Grid-forming battery energy storage systems (BESS) failed to secure any contracts in the UK's second-round auction for grid stability services, specifically inertia.
• •Contracts for these critical grid stability services were awarded to traditional solutions: synchronous condensers and gas-fired generation.
• •This outcome suggests that current tender designs or valuation mechanisms in the UK may not adequately compensate or recognize the full value proposition of grid-forming BESS for inertia services, or that BESS bids were not competitive.
• •For BESS developers, this highlights a need to re-evaluate bidding strategies, cost structures, or advocate for tender design adjustments to better compete for grid stability contracts.
• •Large power consumers and IPPs should note that traditional, often fossil-fuel based, solutions are still securing key grid stability roles, potentially impacting the pace of decarbonization in ancillary services.