EP.178 Ralph Johnson on Battery Storage Optimisation
Feb 1, 2024
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Ralph Johnson, Head of UK Business Development at Habitat Energy, discusses battery storage optimization, strategies of battery asset owners, and the future of the battery market. They explore the importance of a good battery optimiser, maximizing lifetime value for battery storage projects, and the advantages of building optimization software internally. They also discuss the value of a good optimizer during difficult trading periods and the impact of asset saturation and changes to the balancing market. Lastly, they compare the markets of UK, Australia, and Texas in the US and highlight the differences in trading and opportunities for battery storage.
Habitat Energy differentiates themselves by incorporating physical criteria like temperature and discharge depth into their optimization decisions.
Human involvement is crucial in battery optimization despite the increasing role of algorithm-based decision-making.
Habitat Energy tailors trading strategies to asset owners' goals and risk appetite, focusing on fundamental and probabilistic forecasts.
Deep dives
Habitat Energy's Role in Battery Storage Optimization
Habitat Energy is a leading battery storage optimizer in the UK and globally. They specialize in optimization services for standalone and co-located renewables and energy storage. With 500 megawatts currently operational and an additional 500 megawatts contracted, Habitat Energy has seen significant growth in their portfolio. They focus on maximizing revenue and lifetime value for their clients' assets by utilizing machine learning and algorithmic dispatch. Habitat Energy's expertise in market forecasting, data handling, and risk management sets them apart as one of the top optimizers in the industry.
Differentiating Factors in Habitat Energy's Optimization Approach
Habitat Energy differentiates themselves through their performance-driven approach, consistently delivering top results for their clients' assets. Their focus on maximizing lifetime value includes considering asset degradation and incorporating physical criteria like temperature and discharge depth into their optimization decisions. Habitat Energy's in-house data science and technology teams enable them to handle and analyze large amounts of data, allowing for accurate forecasting and algorithmic dispatch. As storage specialists, they prioritize their clients' specific needs and build long-term strategic partnerships. Their nimbleness and adaptability in changing market conditions further contribute to their success.
The Importance of Human Involvement in Battery Optimization
Habitat Energy believes that human involvement is crucial in battery optimization, despite the use of sophisticated software and AI. Human oversight is essential for making strategic decisions, adapting to market conditions, and ensuring asset safety. Habitat Energy's team constantly monitors asset conditions and communicates with clients to tailor their optimization approach. They prioritize performance and understand the statistical nature of decision-making in a rapidly changing market. Their in-house expertise, data handling capabilities, and focus on risk management enable them to provide optimal results for their clients' assets.
Importance of Algorithms in Decision Making
To scale as a business, relying solely on human decision-making is insufficient. In the future, it is expected that algorithm-based decision-making will play an increasingly significant role. Market data and conditions will contribute to approximately 80% of decisions being made by algorithms. However, humans will still be necessary for tail events and black swan events, as well as to verify and check decisions made in high volatility markets.
Customized Trading Strategies and Global Markets
Habitat Energy's approach involves tailoring trading strategies to asset owners' goals and risk appetite. They focus on fundamental forecasting and probabilistic forecasts to make more automated decisions. In the UK, where the market is more mature, Habitat thrives on the complexity of optimizing battery assets across multiple markets. They have also expanded to Australia and Texas, where the markets are growing rapidly. Habitat's sophisticated approach suits the complexity of the Australian market and the large-scale potential of the Texas market. They are also exploring opportunities in Germany, Japan, Italy, Iberia, and Poland, as these markets offer interesting co-location possibilities and growth potential.
This week on Energy Unplugged, Ralph Johnson, Head of UK Business Development, Habitat Energy discusses battery storage optimisation in GB and globally with our Global Software Solutions Director, Mateusz Wronski.
Ralph is responsible for originating and managing Habitat Energy’s strategic partnerships in the UK. He is an expert in battery storage and brings over 15 years of experience working in the energy sector. Previously, Ralph held senior positions at Reactive Technologies and EDF, where he worked across supply-side, renewables, pricing, risk and financial modelling.
Main topics include the following:
• What is a good battery optimiser?
• Strategies of battery asset owners
• The future of the battery market: optimisers, asset owners, and market saturation & reforms
