In the first half of 2024, battery energy storage systems in ERCOT earned revenues of around $70/kW (annualized), on average. And there was a huge disparity between what individual systems earned - with the highest-earning battery in ERCOT making annualized revenues of $130/kW during this period.
Revenues began strongly in January, largely due to Winter Storm Heather. There were also some major spikes in May - but milder system conditions in June mean that revenues have since cooled off, and fallen behind where they were in 2023 at this time.
Due to these milder system conditions, revenues were 20% lower at the end of June than they were in the previous year. Batteries earned an average of $88/kW (annualized) in the first half of 2023.
This year-on-year decrease was due to a variety of factors, including:
- Milder system conditions in June - which led to lower overall demand.
- And a 120% increase in the installed rated power of batteries from 2023 - which led to lower Ancillary Service prices.
Despite this, revenues from some markets - specifically Energy arbitrage, ECRS (which only launched in June of last year), and Non-Spinning Reserve - have actually been higher so far in 2024.
In the past twelve months, battery energy storage rated power in ERCOT has more than doubled
From the end of June 2023 to the end of June 2024, the total installed rated power of battery energy storage in ERCOT rose from roughly 2.4 GW to 5.3 GW. This represents a 120% growth in twelve months.
This addition of nearly 3 GW of new battery energy storage rated power (MW) has contributed to increased competition in Ancillary Service markets - leading to signs of saturation in battery-dominated services, and subsequently lower prices.
This has led to a decrease in the proportion of revenues that battery energy storage systems in ERCOT have earned in Ancillary Services markets.
In the first half of 2023, Energy arbitrage accounted for 14% of battery revenues. And the remaining revenues came predominantly from Responsive Reserve (RRS) and Regulation services.
In the first half of 2024, Energy arbitrage accounted for 26% of battery revenues. And the remaining Ancillary Service revenue proportions were more evenly balanced:
- 29% of revenues came from ECRS.
- 26% of revenues came from Responsive Reserve (RRS).
- 14% of revenues came from Regulation Up and Down.
- And 6% of revenues came from the Non-Spinning Reserve service.
Which battery energy storage characteristics were most advantageous in the first six months of 2024?
The highest-earning battery in ERCOT over the first half of 2024 was Triple Butte BESS.
This battery is owned by Jupiter Power, and it outperformed the Index by 86%.
Triple Butte is a 7.5 MW, two-hour DGR, located in West Texas. These specific characteristics meant it had some advantages in the first six months of 2024:
- West Texas has historically offered the largest daily price spreads (Energy arbitrage).
- Its two-hour duration allows it to take advantage of these price spreads over a longer time frame in a given day.
- This longer duration also has capacity allocation benefits when offering into Ancillary Services that have longer contract requirements (e.g. ECRS, with its two-hour contracts; Non-Spin, with its four-hour contracts).
To learn more about how location impacts battery energy storage revenues in ERCOT, check out our Battery Location Deep Dive.
Subscribers to Modo’s ERCOT products can continue reading below. Learn more about individual battery performances in the first half of 2024.
How did individual batteries perform in the first half of 2024?
Batteries that outperformed the Index tended to earn a larger proportion of their revenues from ECRS and Non-Spin.