In the summer of 2024, battery energy storage systems in ERCOT dispatched nearly 4x more volume during their peak daily dispatch than in the summer of 2023. Of course, more batteries on the system will inevitably mean higher volumes dispatched. However, from the start of August 2023 to the start of August 2024, battery capacity in ERCOT only increased by 63% (from around 4.8 GWh, to around 7.8 GWh).
In fact, the main driver of this increased dispatch has been the shift towards Energy arbitrage as a more prominent part of the revenue stack for batteries. In August 2024, batteries in ERCOT earned 45% of their revenues in Day-Ahead or Real-Time Energy markets - the highest monthly proportion ever.
How have physical operations changed over the past twelve months?
In August 2023, around 3.2 GW of battery energy storage systems were online in ERCOT. They primarily focused their operations on Ancillary Services - and Reserve services in particular.
On an average day in August 2023, batteries collectively contracted close to 1 GW of Responsive Reserve (RRS) contracts for every hour of the day. Batteries also participated heavily in the lucrative Contingency Reserve Service (ECRS), predominantly during the daytime hours.
And they dispatched a small amount of energy (around 465-550 MW, cumulatively) during the evening net load ramp - largely through the Real-Time market.
However, by August 2024 (shown in the lower of the two charts above), overall battery participation had grown massively. This was predominantly due to the increased battery buildout mentioned earlier.
Throughout the average day in August 2024, batteries collectively participated very heavily in Energy arbitrage. They charged heavily (collectively importing around 1 GW at any given time) during the morning solar ramp, and discharged 1.2-1.3 GW consistently during the evening net load ramp - between double and triple the average volumes dispatched in August 2023.
Batteries also contracted 3-3.5 GW of Ancillary Services between 2pm and 7pm - before dropping off significantly to discharge into the Real-Time Energy market.
How did this affect cycles? Subscribers can read the full article
This year-over-year shift in focus - from Ancillary Services to Energy arbitrage - actually led to a slight decrease in average cycling rates. In August 2023, battery energy storage systems completed an average of 0.74 cycles per day, compared to 0.69 cycles per day in August 2024.
Overall, battery operations have changed significantly - but cycling rates have remained relatively consistent.
If your organization has a subscription to Modo Energy’s ERCOT products, you can access the rest of the article below. Find out:
- The revenues and cycling rates of every battery energy storage system in ERCOT in August 2024.
- Which operational strategies lead to higher revenues and/or fewer cycles.
- How the cycling rates of one- and two-hour batteries differ.
- And how cycling rates are likely to evolve in future.
Plus, check out a case study: find out how the operational strategies of three <10 MW Distributed Generation Resources (DGRs) - owned by Jupiter Power, ENGIE, and Hunt Energy Network, respectively - resulted in different revenues and cycling rates.
Not subscribed yet? Watch this video for a sneak peek of our in-depth cycling analysis.
How many cycles did each battery energy storage system in ERCOT perform in August 2024?
Battery energy storage systems in ERCOT earned annualized revenues of $87/kW/year in August. On average, batteries in ERCOT cycled 0.69 cycles/day - equivalent to around 21 cycles across the month.