ECRS has served as a high-revenue market for battery energy storage systems that qualified to provide the service since it launched in June of 2023.
In the first full year since its launch, battery energy storage systems - that have been operational since before the launch - earned roughly 28% of their revenues from the new service.
Something that stands out is the outsized performance of ECRS relative to the other Ancillary Services.
For instance, for the same level of capacity allocation - 3% - batteries earned six percentage points less of their revenue from Regulation than from ECRS.
And this high proportion of revenues relative to the proportion of capacity allocated has also been generally consistent across all Ancillary Services.
Put more simply, these services offer high revenue opportunities for relatively low contracted capacity.
As a result, ECRS was extremely influential in a battery’s overall performance in the twelve-month period since its launch. In that time, seven sites in ERCOT earned more than 50% of their revenues from ECRS.
These seven ECRS-focused battery energy storage systems, on average, outperformed the Index by 50%, earning $308,000/MW over this year-long period.
But is this sustainable?
Much of the aforementioned outperformance happened last summer. This was when ECRS had first launched, and fewer resources qualified for and participated in this service.
As a result, less volume was offered into the Day-Ahead Market to provide ECRS.
This led to ECRS clearing prices that were more than 2x the other Ancillary Services - on average - in the first three months following its launch.
Over the same three-month period in 2024, ECRS clearing prices have - on average - been just 1.47x the other Ancillary Services.
If we look at just July and August of 2024, ECRS clearing prices averaged just $4.74/MW/h.
This was 29% lower than the average clearing prices of all other Ancillary Services, which averaged $6.72/MW/h.
Modo Energy’s ERCOT subscribers can read the full article below to learn about:
- The impacts of ECRS on battery revenues, capacity allocations, and cycling rates.
- Ancillary Service saturation and how it may impact operational strategies in the future.
- The systems that outperformed other battery energy storage systems in ERCOT in the 12 months following ECRS' launch by employing an ECRS-dominant strategy.
How did battery energy storage systems with ECRS-dominant strategies fare?
Seven battery energy storage systems earned the majority of their revenues from ECRS in the twelve months following its launch in June 2023.