Poland's Battery Market is Skipping the Pilot Phase - Entrix

Ed Porter (0:00)

I'm your host, Ed Porter, and welcome back to Transmission.

Now, regular viewers will notice we're not in our regular studio, and that's because we're in Berlin. And what we've done is we've come here to record some special episodes with some fantastic energy experts, and we're going to be bringing those to you over the next couple of months, so watch this space. But no more about that. Let's go to this episode. Poland's battery market is ramping fast. No pilot 3-megawatt projects, no long process of scaling up the sector. They're starting off with big 200-megawatt projects, a size that it took Germany five years to get to. And because Poland runs a central dispatch system, two identical batteries in different locations can earn vastly different revenues. My guests today are Aleksandra and Jan from Entrix. This episode isn't about the theory, it's about what happens when a market is being asked to scale this fast. If you want to take a look at battery assets in Poland, Modo's forecast and benchmark are live. Head to the terminal or ask Ko. Let's jump in.

Aleksandra, Jan, welcome to Transmission.

Aleksandra Radwańska (1:12)

Thank you very much for the invitation. Pleasure to be here.

Ed Porter (1:15)

And looking forward to this as ever. Let's get straight into it. So what is one thing people consistently get wrong about battery optimization in Poland?

Aleksandra Radwańska (1:22)

I think that especially in such a new market like in Poland, people still think that all batteries are created equal, and they should be measured with the same KPIs, which obviously is not true, especially when you think about how batteries are different from each other, how different constraints, cycling limits, technical limitations, ramping rates they have. But also, this is what we knew from, for example, the German market, right? But Poland is even more peculiar, because Poland is a central dispatch system.

So the two batteries that are standing in different regions of Poland, different, let's say, connections, grid connections, can be treated in a different way, or can behave in a different way, because the TSO, the Transmission System Operator and the Distribution Systems Operator are solving, in fact, two problems at the same time. So they are not only looking at the system balance, but the power balance and keeping the frequency at 50 Hz, but they also take care in the same step about power flows within the grid.

So you can end up in a situation where having exactly the same batteries, one standing next to Wroclaw, which is south west, and the other one next to Białystok, which is north east, and they would be used in a completely different way in a dispatch on their whole lifetime.

Ed Porter (3:01)

So even if the duration and the cycling and the warranty all looks very similar and they both went live at the same time, just because of that location, you're going to get very different outcomes.

Aleksandra Radwańska (3:08)

They can be different, right? This is something that we cannot observe on historical data so far, right? Batteries are only starting in Poland, but this is what we knew. It's just the feature of the system that we have, the central dispatch system that we have in Poland. And therefore, what we are very much in favor of is not measuring the batteries with the same exact benchmark or the same exact KPIs, right? We always have to look at the individual opportunity space of each battery, what it really can achieve in such conditions that are given to it, and then measure its performance against what's the environment around it.

Ed Porter (3:54)

I'm really excited to get into this. We're going to be talking about central dispatch a little bit more. We're going to be talking about some of the trends that drive these splits in terms of why certain assets make different amounts. But maybe let's just start off this story with the optimizers themselves, because I think that's a nice way to get into what the topic is.

Every firm that's bidding for Polish mandates, Polish projects, calls itself a credible optimizer because you have to. On a live asset, what is actually separating your credible optimizers, so the people who are doing it really well versus just a good pitch deck?

Jan Kłoczko (4:29)

Well, I would say the companies who pitch themselves as optimizers are usually either traders or companies that develop the algorithm. I would say a good credible optimizer is both and neither because we are right now at the stage of the market where the batteries are going live and the process of getting especially into the ancillary services is much more complicated than what people are used to in Germany and other markets. It's not a walk in the park.