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Polish capacity market auction for 2029 catalyzes gigawatts of battery storage projects

Source：www.ess-news.com

The much anticipated capacity market auction for 2029 conducted by Polskie Sieci Elektroenergetyczne (PSE) ended in the seventh round with a price of PLN 264.90/kW/year ($65/kW/year). Such a clearing price rendered gas projects uneconomical and left significant room for battery storage systems to secure contracts.

By Marija Maisch, Dec 18, 2024

Image: Tesla

The Polish capacity market auction for 2029 which awarded more than 8 GW of capacity contracts was a success for battery energy storage projects. While final results are yet to be released in January, industry insiders assess that the procurement exercise could have catalyzed around 4.2 GW of BESS capacity pre-derating.

A derating factor is a multiplier applied to the actual generation capacity of a unit to determine the maximum size of contract it can secure in the capacity market auction. It is based on the expected availability of the dispatchable capacity in hours when demand is highest. For the 2029 CM procurement, it stood at 61.3%.

This would mean that around 2.5 GW of BESS has secured contracts although this figure could be even higher considering the possibility that some of the projects could have had even bigger nominal power output if they were batteries with shorter storage duration than four hours.

Among the first to announce success in the procurement exercise was OX2, which secured 200 MW/400MWh across two projects which will be commissioned in 2027-2028.

Hynfra Energy Storage reported that two of its BESS projects with a cumulative power output of more than 300 MW (capacity obligation 153 MW) and a cumulative storage capacity of more than 1 GWh secured contracts. Specifically, the two projects are sized at 100.2 MW /200.4 MWh and 203.7 MW/814.7 MWh. 

Columbus Energy said that it has contracted energy storage projects with a connection capacity of 265 MW (capacity obligation of 160 MW at the derating of 61.3%) and a capacity of about 1 GWh.

Enea, in turn, withdrew its gas-fired units with a total capacity of more than 1.2 GW from the auction. It is assessed that a cumulative 1.7 GW of combined cycle gas turbine units were rendered uneconomical at such a low clearing price.

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