October 2025: Battery revenues in CAISO land at $2.99/kW

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October 2025: Battery revenues in CAISO land at $2.99/kW

Grid-scale batteries in California earned $2.99/kW-month in merchant revenues during the month of October 2025.

That’s $0.44/kW-month higher (+17%) than September 2025. This marks the third consecutive month of growth.

However, fleet-wide merchant revenues fell $0.87/kW-month (-22.7%) year-on-year, from a base of $3.86/kW-month in October 2024. This annual decrease was smaller than the prior two months.

Ancillary Service revenues declined slightly, decreasing revenues by $0.17/kW-month in total relative to October 2024. IFM energy revenues decreased the most, with a decline of $1.09/kW-month. However, batteries are increasingly being called upon in the real-time market: FMM and RTD energy together increased $0.38/kW-month.

Find last month’s report here.

Executive Summary

Merchant revenues recovered month-on-month but remain below 2024 levels: October 2025 BESS revenues reached $2.99/kW-month, marking the third consecutive monthly increase (+17% from September), though still 22.7% below October 2024's performance.
Mild weather suppressed revenue opportunities: Cooler temperatures kept daily peak loads at just 27.7GW (vs. 30.8GW last year) and day-ahead prices below $65/MWh, resulting in steady but limited daily revenues of $55-165/MW-day throughout October.
Batteries increasingly shape CAISO's load profile: The 14.7GW BESS fleet imported 7GW during midday peaks and discharged 7.4GW in evenings, reducing effective load swings from 25GW to 17.5GW, though wholesale markets don't compensate this grid management service.

For any questions about CAISO research or benchmarking, reach out to logan@modoenergy.com.

The 2025 trend continues: less day-ahead Energy arbitrage opportunity than last year. Four-hour Top-Bottom averaged $4.2k/MW last month — a decrease of 17.7% from October 2024.

Extremely high prices occurred less frequently, with daily load peaking at just 27.7GW on average. A year ago, daily load typically topped out at 30.8GW (-10.2%). Around-the-clock average demand did not decrease to the same extent: it declined from 25.0 to 22.9GW (-8.5%).

The continued solar buildout in CAISO pushed net load down even further than that. An increase in solar generation of 11.7% to 17.8GW decreased average net load to 14.7GW (-15.3%).

Outside of wholesale Energy markets, the volume-weighted regulation price declined to $3.19MW (-17.5%). The average price of natural gas, and thus the typical marginal cost for peaking plants, was essentially unchanged.

Milder weather dampened load peaks

In another continuation of trends from recent benchmark reports, 2025 remains a mild weather year. The average state-wide daily high never once exceeded 80°F. It did so eleven times last year.

These cooler temperatures partly explain why peak load never registered more than 32GW in October 2025. The bus-average Energy price also never exceeded $70/MWh due to this lack of high-demand periods.

The extremely high temperatures of October 2024 were concentrated in the beginning of the month, and lifted the average daily high to 72°F. That’s 7°F higher than the average daily high last year (+9.7%).

And because temperature extremes — both realized and expected — are a significant driver of top-bottom spreads, revenue opportunities were concentrated in the beginning October 2024 as well.

October 2025 revenues were steady

Daily BESS revenues for October 2025 bounced between $55/MW-day ($20/kW-year, annualized) and $165/MW-day ($60kW-year), with one exception on October 10th. That reflects the stability of the day-ahead TB4 Index, which bottomed out at $61/MW ($22/kW-year) and never went higher than $185/MW ($68/kW-year).

Those stable revenues added up to a monthly headline number of $2,985/MW-month ($36/kW-year) for merchant revenues in CAISO. Their uniformity also meant that it took exactly half the month — til October 16 — to accumulate half the eventual monthly revenue.

The lack of high-demand days and scarcity events suppressed the potential for lucrative opportunities. However, October 2025 did see the third sequential month-over-month increase in fleet-wide revenues. This bucks the trend of last year, where merchant revenues (and capacity payments) were higher in September.

As winter closes in and sunsets happen earlier, there will be less inexpensive solar generation available to meet the evening demand peaks. Dispatchable generation — peaking plants and batteries — will have to fill that gap in supply and demand. That would increase the potential for higher evening Energy prices, and thus higher revenues, going forward.

Batteries mold load into a more manageable shape

CAISO currently hosts the largest operational BESS fleet in the United States — a direct result of the CPUC’s Resource Adequacy program. On average, the 14.7GW fleet imported 7GW of energy at its midday peak in October 2025.

The evening peak discharge of the fleet is 7.4GW on average, just shy of the typical natural gas generation, which sits at 8.4GW at the same time of day.

The year-on-year growth in the maximum fleet discharge only grew by 1GW, over a period of time when the total nameplate capacity increased 4.5GW. Much of this extra power is being exported later in the evening, rather than at the times of peak load. Despite the peak discharge growing by just 1GW, the total amount of energy exported by BESS in the evenings grew from 24.3GWh to 32.8GWh.

Minimum average net load for the month of October 2025 reached just 733MW (-86.6% year-on-year). As a result, net load swings by 25GW on the typical day in CAISO. But thanks to the 43.5GWh of battery imports during the middle of the day, the effective load swing is just 17.5GW. (“Effective load” is defined as net load plus BESS charging.)

CAISO handles the steepest net load swings among all the US grid operators, and batteries are a key part of their management approach. However, BESS are not compensated very well for this service in wholesale markets.

Day-ahead prices never exceeded $65/MWh in October 2025

The relative calm last month suppressed the demand for electricity, and that meant the price of Energy remained low. The maximum price for the bus average node came at 6pm on October 29th, and registered at just $63.85/MWh. The average price at that hour of the day was just $50.11/MWh, and was not even the highest-priced hour of the month. That came at 6am, with the average price in that hour marginally higher at $51.06/MWh.

Peak prices in October 2025 never matched those of a year prior, but lower trough prices did bolster arbitrage opportunities. The midday trough price decreased by $8/MWh, and in the middle of the month nearly dipped below zero.