In September, six new battery energy storage systems became commercially operational. In total, this resulted in 731 MW of new capacity by rated power - a record for a single month.
This was the second time in four months that a record amount of capacity - by rated power - was installed in a single month.
As a result, commercially operational battery energy storage capacity in ERCOT now stands at 6.4 GW. This is up 60% from just over 4 GW at the beginning of the year.
In addition to 731 MW, 878 MWh of batteries - by energy capacity - became commercially operational. This meant that September was not quite a record for battery installations by energy capacity.
That distinction still belongs to December of 2023, when nearly 1,200 MWh began commercial operations - though October of 2024 may be shaping up to surpass last December.
The 878 MWh of new energy capacity brings installed energy capacity to 9.5 GWh. Amazingly, over August and September of 2024, nearly 2 GWh of capacity was approved for commercial operations.
The six new battery energy storage systems are distributed across the state - and three of them are owned by ENGIE.
So, how does this change the distribution of commercially operational batteries by location? What about by owner?
How have the locations of new battery energy storage in ERCOT changed in 2024?
The South Load Zone continues to lead the way for installations thus far in 2024. In fact, through the end of September, commercially operational battery capacity in the South has increased by 96% in 2024. This has meant an increase from just under 1.6 GWh to over 3 GWh.
The next closest load zone in terms of growth in 2024 is the North Load Zone. In the North, commercially operational battery energy storage capacity has grown by around 40%.
Remarkably, commercially operational capacity has grown by over 25% in each of the four load zones.
How have portfolios of owners of batteries in ERCOT continued to evolve?
ENGIE owns three of the six batteries that were fully approved for commercial operations in September. By rated power, these three battery energy storage systems have 518 MW of capacity.
With these additions, ENGIE becomes the first battery owner in ERCOT with more than 1 GW of operational capacity.
However, ENGIE is not the first to 1 GWh of operational capacity. This is because Plus Power and Jupiter Power have historically developed and/or acquired almost exclusively two-hour duration systems.
As a result, they each own more than 1.3 GWh of commercially operational capacity.
In fact, ENGIE stands out as something of an outlier among the owners of the most capacity in ERCOT. Six of the seven owners with the most installed capacity have an average asset duration of more than 1.5 hours.
How does this align with recent trends in the ERCOT BESS market?
The continued shift toward longer-duration resources is in line with the fact that battery energy storage systems are earning an increasingly large proportion of their revenues from Energy arbitrage.
This is largely because the volume of Ancillary Services procured by ERCOT remains relatively static, while installed battery capacity continues to grow rapidly. This has meant that batteries are providing an ever-increasing proportion of Ancillary Services.
As a result, Ancillary Service prices continue to decline. Many battery developers in ERCOT have responded by trying to increase their flexibility to capture revenue from wholesale Energy markets - meaning longer-duration resources.
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