Operational batteries in PJM entered November having observed consistently strong revenue opportunities throughout 2025.

Battery energy storage systems (BESS) in PJM averaged monthly revenues of $24/kW-month, or $288/kW-year, through September 2025.

Higher clearing prices for providing Regulation and wider Real-Time energy spreads lifted market opportunity across the system - even as outcomes varied widely across individual assets.

PJM’s batteries followed the familiar global path: ancillary services first, energy later. PJM batteries continue to earn the bulk of their revenues from Regulation and frequency response services, with energy arbitrage playing a secondary, but gradually expanding role.

Regulation is still the leading battery revenue source in PJM

Regulation clearing prices have consistently exceeded other ancillary service clearing prices in PJM, often clearing more than 5x higher than synchronized or primary reserves. Throughout 2024 and 2025, Regulation prices have rivaled or even exceeded Energy.

PJM’s Regulation market redesign in early October 2025 amplified this dynamic. 5-minute Real-Time Regulation prices became highly volatile, with short-lived spikes as high as ~$1,800/MW/h during ramp hours. Batteries that were online and able to receive awards would have captured outsized returns.

However, those extremes reflected a market adjusting to new clearing dynamics rather than a step-change in underlying demand. As more market participants qualified for the re-design surfaced and participation began to normalize, Regulation prices in November eased back from October’s peaks. Clearing prices averaged $61/MW/h, still 36% higher than Energy, but a much smaller gap than the 136% gap in October.

But Regulation is only part of the story.

Was there market opportunity for battery energy storage outside of Regulation?

While Regulation is the primary revenue stream for batteries in PJM today, energy arbitrage will become the largest component of merchant revenues in the long term.

Unlike ERCOT and CAISO, PJM’s energy prices are still shaped primarily by load rather than renewable output.

Energy prices followed the shape of demand, creating two daily peaks instead of the deep midday troughs seen in solar-heavy systems. This structure supports a consistent arbitrage window for battery energy storage around ramp hours.

Throughout this report, arbitrage opportunity is measured using Top-Bottom spreads (TBs).

November 2025 marked a clear step-change in Real-Time price volatility compared to last year.

Real-Time prices at the PJM-RTO node breached $200/MWh on multiple days, with several intervals spiking into the $300–400/MWh range.

Crucially, these spikes were not confined to a single stress window. Elevated prices appeared across early-morning ramps, midday periods, and evening peaks.

That is in contrast to November 2024, when price profiles were far smoother. Last year’s volatility was largely concentrated in the evening ramp, keeping daily spreads compressed.

Repeated intraday price dislocations, not a single peak, drove average Real-Time TB4 spreads up to $216/MWh.

​The monthly averages tell the same story. Real-Time TB1 spreads widened by $43/MWh year-on-year, while spreads increased by $20/MWh in the Day-Ahead Market.

​​This is the first edition of Modo Energy’s benchmark report for battery revenues in PJM. Subscribers to Modo Energy’s Research can read on to learn more about:

• how fuel costs are still the underlying driver of average prices in PJM,
• why the potential for larger shoulder season spreads is rising with the development of solar generation,
• how generation outages for maintenance influenced spreads in PJM this Fall,
• and the levels to which congestion results in varying energy arbitrage opportunity for batteries across the region.

Fuel costs set the tone for energy prices in PJM

PJM remains a thermal-heavy system, this defines price formation. Natural gas and nuclear generation dominate the stack, with coal providing additional baseload capacity.

As a result, energy prices are frequently set by thermal units at the margin. Shifts in fuel costs - particularly gas, and coal in certain regions - translate directly into changes in power prices across PJM.

In November 2025, higher gas and coal prices lifted the entire energy price baseline, with power prices nearly tracking swings in gas prices throughout the month. ​

​Additionally, daily average load grew 6%, from 84 GW in November 2024 to 89 GW in November 2025 leading to more expensive generators being cleared in the merit order.

When gas is on the margin, small fuel price moves go a long way. An incremental $1/MMBtu increase typically results in a ~$7–10/MWh increase in power prices.

​​In turn, November 2025 prices cleared higher and with much wider dispersion for a similar range of net load than in November 2024.

Solar generation is on the rise, giving way to larger price spread potential

The development of solar generation in PJM lags behind markets like ERCOT and CAISO, but is underway. The average daily peak in grid-scale solar output increased by 35% year-over-year to 6.2 GW at midday in November.

However, renewables still represent a relatively small share of the total generation stack serving PJM load.

Unlike CAISO, where solar creates deep midday price troughs, PJM’s incremental renewable growth has not displaced thermal generation during typical charging hours.

​As a result, PJM batteries continue to operate in a market defined by load-following thermal generation rather than renewable-driven price canyons.

Net load remains elevated through the middle of the day, keeping gas plants online and ensuring prices are set by the thermal units. This limits the spread in prices available to battery energy storage systems.

Outage levels contributed to tighter spreads in November than October 2025

Another driver that can influence energy prices are planned and forced generator outages.

In PJM, planned maintenance is typically concentrated in shoulder months, and highest in April, May, and October, when demand is low enough to take units offline and have lower reliability risks.

Generation outages peaked at around 71 GW in October before steadily declining through November, reaching 29 GW by month-end.

That shift shows up clearly in price spreads.

October 2025 recorded wider Day-Ahead and Real-Time spreads than November, reflecting tighter system conditions when more capacity was unavailable.

For batteries, that distinction matters. Outages tend to inflate arbitrage opportunity at the system level, while their timing and location determine where that opportunity materializes on the network.

Volatility creates opportunity - congestion decides who wins

While system-wide spreads were high in November, arbitrage opportunity varied widely by location. Even within the same load zone, batteries experienced materially different price outcomes.

The Real-Time price profiles show why.

At the system level, PJM shows the familiar morning and evening ramps. But zones such as Dominion and BGE regularly separate from the PJM-RTO average, most visibly during peak hours. These congestion-driven price separations create repeatable intraday disparities that batteries can monetize.

In contrast, zones with similar load profiles but stronger transmission connectivity tend to track the RTO average more closely. Their price profiles are flatter, with fewer sustained deviations and less arbitrage upside.

Operating batteries in Dominion and BGE were sited in locations with the highest Top-Bottom spreads in November, reflecting persistent congestion and limited transfer capability.

Planned batteries show an even wider range of outcomes. Within the same zones, November 2025 spreads diverge sharply across nodes. The highest spreads appear at Fourth Quarter, a planned 500 MW battery in Maryland’s PEPCO zone, followed by Chapel Energy Storage, a 300 MW project in Maryland’s BGE zone.

Transmission constraints and nodal pricing effects can amplify or suppress spreads at individual battery nodes, creating winners and losers within the same load zone.

As more battery energy storage systems are developed in PJM and the value of the Regulation service is suppressed, this dispersion matters more. Small differences in siting - down to the node level - can swing expected arbitrage value by multiples.