Executive Summary
- California's Resource Adequacy (RA) program provides a major revenue stream for power resources, offering predictable income through long-term contracts.
- In 2022, RA contracts in CAISO’s unconstrained areas ranged from $4.29/kW/month to $14.67/kW/month, with top earners making up to $30/kW/month.
- Starting in 2025, the new "Slice of Day" framework will redefine RA obligations hourly, creating more flexibility for renewables and storage assets.
Subscribers to Modo Energy’s Research will also find out:
- How must-offer obligations work and why they de-risk revenue for energy storage and generation assets.
- The differences between System, Local, and Flexible Resource Adequacy and how they impact payments.
- How CAISO’s new framework will reshape RA contracts, bidding strategies, and project financing.
To get full access to Modo Energy’s Research, book a call with a member of the team today.
Introduction
California's Resource Adequacy program is a significant source of revenue for resources. It's designed to ensure that the California Independent System Operator (CAISO) has access to enough capacity to meet the needs of the future power system.
In this article, you’ll understand the essentials of providing Resource Adequacy: