Aurora’s latest Distributed and Flexible Energy Market Outlook Report for H1 2019 presents Aurora’s comprehensive view on developments in policy and technology, our integrated market outlook including revenue stream forecasts, and investment case analysis.
Key developments over the past half year:
- Near-term market and regulatory developments continue to drive uncertainty for newbuild flexible assets, with the ongoing suspension of the Capacity Market and removal of embedded and behind-the-meter benefits through the Targeted Charging Review
- Capacity Market reinstatement is expected and will represent a key revenue stream as existing plants exit the system and prices recover
- Mid-long term shifts in the market favour flexible and distributed capacity, with growth driven by a system increasingly reliant on intermittent renewables as decarbonisation continues and accelerates
- Increased access to the balancing mechanism through Project TERRE and the ongoing Wider BM Access project drives future revenues for flexible assets and will provide cross-border balancing opportunities in the long term
- Opportunities for small-scale demand response will grow as technological developments facilitate flexibility from home battery storage and electric vehicles, aggregation capabilities develop, local flexibility markets emerge and forward-looking charges provide more granular locational signals
- Business models must remain flexible in order to respond to changing market conditions
- Day/week-ahead procurement of ancillary services will allow flexibility in optimising revenue streams week by week
- Fully merchant energy trading business models are becoming increasingly viable
The report and accompanying data can be downloaded from the reports section of EOS.
The next update of the market outlook report will be available in Autumn 2019.
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