Poland’s new capacity market auction could hamper storage deployment

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From pv magazine ESS News site

Poland’s battery revolution is in the starting blocks, but a newly proposed regulation could hamper it from reaching its full potential.

Earlier this week, a draft ordinance outlining the parameters for this year’s procurement exercise was published (here: https://lnkd.in/eGhde6ft). One of its key parts was a proposed reduction to the BESS derating factor from 95% to 57.6%.

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.

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For example, with the new 57% derating factor, a 100 MW battery would be able to secure a contract covering 57 MW of capacity. Investors would usually contract even less than that to make sure they are able to fulfill their capacity obligation.

“Derating factors don’t necessarily need to be duration specific,” says Grzegorz Walkowski, senior associate at Aurora Energy Research, tells pv magazine Energy Storage. “In the Polish market, units are expected to produce their contracted capacity for four hours, leaving investors to adapt their strategy based on their storage duration and repowering plans. This is generally positive as it allows the market to determine the most effective approach.”

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