Executive Summary
- Day-Ahead arbitrage accounted for 72% of wholesale battery revenues in CAISO in 2024, up from 64% in 2023, with SP15 offering the highest arbitrage potential.
- September 5th, 2024, saw the year’s highest Day-Ahead price spread of $543/MWh, as system demand hit a record 47,750 MW at 6 p.m.
- Three nodes in Central California earned the highest arbitrage revenues, reaching $55,000/MW, outperforming all SP15 locations.
Subscribers to Modo Energy’s Research will also find out:
- Why Southern California offers better long-term arbitrage potential, despite some Central California nodes outperforming it in 2024.
- How locational price volatility affects battery investment decisions, and why some high-revenue nodes carry more risk.
- Which nodes in NP15 saw the highest monthly earnings variations, and what this means for future arbitrage opportunities.
To get full access to Modo Energy’s Research, book a call with a member of the team today.
Introduction
In 2024, 72% of wholesale revenues for grid-scale battery energy storage in CAISO came from buying and selling electricity in the day-ahead power market. But these arbitrage revenues weren’t the same everywhere.
Arbitrage opportunities vary depending on where in the power system a battery is connected. This is because energy prices in CAISO are locational - meaning they vary across the power system as transmission congestion occurs.
In this article, we’ll examine the history of energy prices across California to identify which locations provided the best potential for energy arbitrage and the drivers behind price spreads across the state.