Pricing
06 Mar 2024
Brandt Vermillion

ERCOT: Battery energy storage response to the March 4th price spike

Between 6pm and 7pm on Monday (March 4th), Real-Time prices in ERCOT reached nearly $1,000/MWh in multiple settlement intervals.

As a result, battery energy storage systems responded with a maximum net output of 1,041 MW.

These high prices occurred despite Net Load peaking at 46.2 GW - just 65% of January’s all-time record of 70.7 GW.

So, what drove Monday night’s scarcity?

The start of March marked the end of the winter embargo for planned generation outages in ERCOT - i.e. generators were able to take planned outages again.

The amount of thermal capacity unavailable (due to both planned and forced outages) nearly doubled in a matter of days - from 11.7 GW on February 29th, to 22.4 GW during the highest-priced hour of March 4th.

On top of this, wind generation was well below its 30-day rolling average.

So, as the sun was setting on Monday and solar generation was falling, ERCOT only had 4-5 GW of wind generation available.

This resulted in Net Load increasing rapidly as the sun set - with reduced levels of available generation able to meet this Net Load ramp.

Ultimately, the amount of capacity available to the economic dispatch fell to just 842 MW at 6:25pm - and System Lambda reached $885/MWh in the following SCED intervals.

Battery energy storage systems responded with a maximum net output of 1,041 MW - during the 6:35pm SCED interval.

And ERCOT manually deployed 550 MW of ECRS to help meet the short-term scarcity.

This helped to alleviate the scarcity, and subsequently bring System Lambda back down.