Executive Summary
- CAISO merchant battery energy storage revenues fell to $51k/MW/year in 2024, a 36% decline from 2023, with December revenues hitting a two-year low of $24k/MW/year.
- Wholesale energy price spreads dropped by 27%, reducing arbitrage opportunities and leading to a $22.6k/MW/year decline in energy revenues.
- CAISO saw a record 712 hours of negative prices in 2024, over three times more than in 2023, driven by increasing solar generation and stagnant demand.
Subscribers to Modo Energy’s Research will also find out:
- How battery ‘cannibalization’ is reducing wholesale price spreads and impacting future revenue potential.
- Why natural gas prices are a key driver of wholesale energy revenues, and what changes in 2025 could mean for battery earnings.
- How CAISO’s Resource Adequacy program is evolving, and what rising payments for reliability services mean for battery operators.
To get full access to Modo Energy’s Research, book a call with a member of the team today.
Annual CAISO battery energy storage revenues were 36% lower in 2024 than in 2023
In 2024, merchant revenues for grid-scale battery energy storage averaged $51k/MW/year - a 36% decrease from $80k/MW/year in 2023.
Merchant battery energy storage revenues were as high as $123k/MW/year at the beginning of 2023. By December 2024, they had fallen to $24k/MW/year, their lowest level in two years.
