Ancillary Services have historically been the largest source of revenue for battery energy storage systems in ERCOT. Over the course of the past year, the replacement of Ancillary Service revenues by Energy arbitrage has been well-documented.
This article not only re-visits prior analysis on the continued growth of battery energy storage participation in Ancillary Service markets, but also explains how Ancillary Services still factor into the equation when it comes to maximizing revenues.
Executive Summary
- Average volume offered by batteries increased by nearly 3x in ERCOT’s Ancillary Service markets in 2024, resulting in consistently lower clearing prices.
- Opportunities still exist in Ancillary Service markets, under certain market conditions and during certain times of day.
- Batteries that were able to consistently offer volume at prices close to Ancillary Service clearing prices - rather than far below - tended to earn more revenue.
Ancillary Service markets continue to become more competitive, led by more battery energy storage capacity
Battery storage operators earned less than 40% of their revenues from Ancillary Service markets in ERCOT in the last three months of available data.