In general, batteries that are available less often miss out on greater revenues - but this isn’t always the case.
In 2023, battery energy storage systems in ERCOT were available for commercial operations 97% of the time (on average). And well-timed availability was crucial for maximizing revenues.
In fact, one system missed out on roughly $40,000/MW (around 20% of its potential annual revenues) - despite being available 96% of the year.
[Note: In this article, “availability” refers to the telemetered resource status of battery energy storage systems. Battery operators communicate this to ERCOT every 15 minutes.
For the sake of fair comparison, this article only looks at battery assets that began commercial operations in ERCOT before January 1st 2023.
To calculate “missed projected revenues”, we have used the Modo Energy ERCOT BESS Index - i.e. the average amount, per megawatt, that batteries earned - during the periods that each system was unavailable.]
Being available during high-revenue periods is vital for battery energy storage systems
In general, the more often a battery is available, the more money it makes. However, because of price volatility in ERCOT, it’s vital to ensure that any periods of unavailability (e.g. for maintenance or testing, etc.) don’t clash with periods of potentially high revenues.
In 2023, 50% of all battery energy storage revenues in ERCOT were earned across just 13 days. Therefore, there was an outsized cost to being unavailable on any one of those days.
Some systems missed out on significant sums (>$7,500/MW/year), despite having high availability (>96%) over the course of the year. This is because those periods of unavailability were often unfortunately timed.
Battery energy storage systems are more likely to be available when prices are highest
In 2023, battery energy storage revenues in ERCOT were 10x higher in summer (June to September, inclusive) than during the rest of the year. This was due to huge price spikes during those summer months.
And, as you would expect, batteries were more likely to be available for commercial operations during these high-revenue periods.
- The average availability of batteries during the summer months (June to September, inclusive) was 98.7%.
- Immediately following those months, in October and November, average system availability fell to 95.9%.
This was likely due to some systems scheduling their downtime during periods when revenues were expected to be lower.
Though batteries in ERCOT were generally successful at avoiding downtime during high-revenue periods, overall availability was not consistently 100% throughout the summer. So, what was the actual cost of unavailability during high-revenue days?
Benchmarking Pro ERCOT subscribers can dive into a couple of individual case studies below.
Case studies: What was the actual cost of unavailability for individual battery energy storage systems?
As highlighted above, revenues for some battery energy storage systems were hit particularly hard by periods of unavailability.
Let’s take a look at two systems in particular:
- The first missed out on around 21% of its projected annual revenues - despite being available for 96% of the year.
- The second missed out on around 6% of its projected annual revenues - despite only being available for 84% of 2023.
Zapata 1’s revenues were hit by unfortunately-timed unavailability
Throughout 2023, Zapata 1’s overall availability (96%) was roughly in line with the average for battery energy storage systems in ERCOT (97%). However, in those periods it was unavailable, price spikes meant that there were huge revenue opportunities.
In fact, during those periods of unavailability, Zapata missed out on revenues of around $42k/MW in 2023.
i.e. If Zapata 1 had been available 100% of the year, its annual revenues would’ve been roughly $42k/MW higher (based on the average earnings of batteries during the periods Zapata 1 was unavailable).
When it was available, Zapata 1’s revenues frequently outperformed the Modo Energy ERCOT BESS Index.
Therefore, it’s reasonable to assume that its revenues would’ve been even higher than we’ve estimated here. In fact, on August 24th (the day before Zapata 1 went offline, and the fourth most lucrative day of 2023 for battery energy storage systems in ERCOT), Zapata 1’s revenues were roughly $3.7k/MW (or 45%) higher than the average.
However, it experienced an unfortunate two-week drop-off in availability levels - starting on August 25th (the single highest-revenue day of the year for batteries).
And, during those two weeks, batteries earned roughly $4k/MW/day - which meant that Zapata 1 missed out on potentially lucrative revenues. This was likely due to unplanned downtime, but it highlights the impact of being unavailable on days when ERCOT prices spike.
Byrd Ranch was frequently unavailable - but usually during periods when battery revenues were lower
Despite being unavailable 4x more often than Zapata 1, Byrd Ranch’s missed revenues only totaled around $9k/MW in 2023.
i.e. If Byrd Ranch had been available 100% of the year, its annual revenues would’ve been roughly $9k/MW higher (based on the average earnings of batteries during the periods Byrd Ranch was unavailable).
Byrd Ranch was unavailable for 16% of settlement periods in 2023, spread over 80 different calendar days.
However, if we look at the same lucrative two-week period as before, Byrd Ranch was available roughly 99% of the time.
Therefore, the timing of its unavailability was far less costly than Zapata 1’s. In fact, during this period, its missed potential earnings came in at just $4/MW/day over the two week period.
How much did all battery energy storage systems miss out on, due to unavailability?
In general, batteries that are available less often tend to miss out on greater revenues. But, as outlined above, the timing of that unavailability can have a much bigger impact on revenues than the overall amount of time spent unavailable.
So, how much did each battery energy storage system in ERCOT miss out on in 2023 - due to unavailability?
It’s hard for batteries to avoid periods of unavailability entirely. That said, it’s vital to ensure that any unavailability coincides with those periods of lower potential revenues.
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