Researchers propose ESS market reform for flexibility
At a National Assembly seminar, researchers proposed a fundamental reform of the electricity market structure to enable energy storage systems (ESS) and other flexibility resources to provide diverse services and earn appropriate profits.
Our take
Will Korea open a merchant route for battery storage beyond central contract market payments?
Korea's mainland battery storage contracts allow no arbitrage, so a merchant route there depends on rule changes that so far exist only as seminar proposals such as cap-and-floor and revenue stacking.
Jeju's 15-year contracts already pay 60% of the bid price as a fixed amount and leave the rest to arbitrage, so a domestic template exists. What decides is whether the government carries that design, or a floor-and-cap rule, into mainland tenders.
For investors — Contracted storage investors should price mainland bids on the fixed contract alone and treat any move to the Jeju fixed share as a change that shifts part of the return to trading.
Merchant storage investors and optimisers should look to Jeju, where contracted storage may already trade, as the only current test of trading-based returns in Korea's storage tenders.
Watch: Proposals for ESS market reform and introduction of new revenue streams like arbitrage and ancillary services.
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