How do you interpret the Index value?

Our Indices show the revenue an asset would generate, normalized to either it's energy or power capacity, over a period of time. Examples include GBP/MW/h, USD/MWh/year.

For example, a 50 MW, 100 MWh asset with an Index value of 10 GBP/MW/h for settlement period 40 indicates that the asset would generate a revenue of 10 GBP/MW in one hour, if it maintained the GBP/MW revenue it achieved in settlement period 40, for one hour. Therefore, because settlement periods are half an hour long, and the asset is 50 MW, this asset generated 5 GBP/MW, or 250 GBP in settlement period 40.

When looking at a single asset, we normalise by the rated power (MW), or energy capacity (MWh) of the asset. Note for rated power we look at the asset itself, not the grid connection. When looking at the BESS Indices, which represent the average revenues of a group of assets, we take the total revenue earned across all assets in the index, and normalise by the total rated power/energy capacity of daily active assets.

By daily active assets, we mean all assets within the Index which registered some market activity on a particular day (submission of FPNs, awarded frequency response contracts, etc). Assets which do not register any market activity on a day are considered inactive, and their capacity is not included in the Index for that day. This is for all revenue streams excluding the Capacity Market.

For normalising Capacity Market revenues, we include the capacity of all assets with active contracts, even if considered 'inactive', alongside all other daily active assets. This is because their revenues still contribute to total revenue numbers.

Is asset availability included in the Index?

As we normalise revenues to the daily active Index capacity (see above), asset unavailability (planned or unplanned) does not impact the Index value.

However, when looking at individual assets, we normalise to the capacity of the asset, which does not take into account asset activity. Therefore, the GBP/MW value reported for an individual asset will decrease if it does not actively participate in markets.

Does Modo Energy monitor degradation?

No, as there is no publicly available data on asset degradation. Degradation is very difficult to model, as it is a function of throughput, environmental conditions, the cells themselves, age, depth of discharge, etc etc...

Therefore, we do not include any degradation-related costs of high throughput operational strategies in the benchmark indices.

Do we include Capacity Market revenues?

Capacity Market contracts are included in the GB BESS Indices by default. However, Benchmark Pro subscribers can toggle off longterm contracts (which includes Capacity Market revenues) in the Index Breakdown.

Why does an asset show wholesale revenues on the Index Breakdown but not in Revenue Operations?

This is probably because the asset is a non-Balancing Mechanism unit (BMU). As wholesale revenues are only indicative for non-BMUs, we do not report wholesale activity below 1-month granularity. For example, a non-BMU may show wholesale revenues on the monthly Index Breakdown, but will not show wholesale activity on the asset's revenue operation chart for the same month.

How is contracted power calculated?

In the Index Breakdown table we indicate the percentage of contracted power for each asset. This is the average of power contracted to provide frequency response / asset rated power, for periods when the asset is contracted into frequency response services. We only consider periods when an asset holds a frequency response contract to account for downtime of non-BMU assets, which we have no visibility over other than frequency response contracts.

Why do reported revenues differ from clearing prices?

The revenues we report in the index are normalised across the rated power of each asset. Therefore, if an asset contracts only a portion of it's capacity into a particular market, the GBP/MW/h value we will report for that market for that asset will be lower than the clearing price of the market.

For example, if a 25 MW asset contracted 20 MW into DCH at 5.9 GBP/MW/h, we would report a revenue of (5.9 * 20) / 25 = 4.72 GBP/MW/h.

Does the Index report net or gross revenue?

The index reports net revenue in every period, in each market type. Therefore, if viewing the Index at a daily granularity, we will report the net revenue in wholesale markets.