Overview

Welcome to the methodology for Modo Energy's NEM battery energy storage revenue forecast. In October we hosted a livestream on the outlook for energy storage in the NEM, introducing the forecast and highlighting key trends in the market.

A radically different battery revenue forecast

• Built in-house: our entirely new model is built from the ground up gives a fresh view of future revenues for battery energy storage
• Data-driven for storage: we use our industry-leading view of today to model storage for tomorrow and beyond to give you a data point per 5-minutes to 2055.
• Transparent: core inputs are based on reputable third parties like AEMO and CSIRO. For full transparency, the model and method are detailed in this guide.
• Principled: we've built the forecast we would use. It's plug-and-play into a business model, highly locational, and uses the latest Modo benchmarking and research data to inform, adapt, and explain.
• A capacity buildout that reflects the real world: commercially scalable and proven technologies realistically respond to economics. Our capacity expansion model iterates on the build-out of gas, battery energy storage and renewables.

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This guide describes each part in some detail. Use the sidebar or search (command + K) to navigate to the details you're interested in.

Our model is made up of two parts

1. Fundamentals model for energy and FCAS prices in the spot market. These are driven by five-minutely supply stacks, informed by a techno-economic capacity build-out, variable short-run marginal costs and storage optimisation.
2. Battery dispatch model using mixed integer linear programming to co-optimise dispatch of flexibility into energy and FCAS markets.

Check out the major components of the forecast in more detail by clicking a section below.