Pricing
10 Jul 2024
Avery Dekshenieks

What did ERCOT battery energy storage revenues look like in April 2024?

The ERCOT BESS Index represents average battery energy storage revenues across a given timeframe. In April 2024 (the last full month for which ERCOT market disclosure data exists), batteries listed on the Index made around $65,000/MW (annualized) on average.

This was 20% more than the previous two months combined. But where did these revenues come from?

Avery explores battery energy storage revenues in April, May, and June.

Revenues were also 26% higher than at the same time last year. However, Ancillary Service revenues actually fell overall - with that increase coming from Energy arbitrage earnings.

Head to this article to learn more about 2023 battery revenues.

41% of battery energy storage revenues in April came from Energy arbitrage

In April 2024, battery energy storage systems earned 41% of their revenues from Energy markets. This is part of an ongoing trend - 33% of battery revenues came from Energy arbitrage in the first four months of 2024, compared with just 15% in the first four months of 2023.

Historically, battery energy storage revenues have been dominated by Ancillary Services.

As operational battery capacity increases, these Ancillary Services will start to become saturated - pushing prices down. And, as this happens, batteries will continue to earn a larger proportion of their revenues from Energy arbitrage.

In fact, in April, the proportion of overall battery energy storage revenues from Regulation services hit its lowest-ever monthly level - just 14%.

How did duration impact revenues in April?

Longer-duration battery energy storage systems (1.5+ hours) earned 60% of their revenues from Energy arbitrage. Whereas shorter-duration batteries earned just 28% of their revenues from Energy.

Instead, shorter-duration batteries earned 30% of their overall revenues from the Responsive Reserve Service.

And, on average, two-hour systems earned 44% higher revenues than one-hour batteries in April.

In fact, the top seven systems on the ERCOT BESS Index in April all had a duration of greater than 1.5 hours.

Subscribers to Modo’s ERCOT products can continue reading below. Find out:

  • Which operational strategies were most lucrative in April.
  • Which specific battery energy storage systems outperformed the Index.
  • How the portfolios of ERCOT’s largest battery owners compared.
  • And what revenues looked like in May and June - according to the ERCOT BESS Index “nowcast”.

Which operational strategy was most lucrative for batteries in April 2024?

As we outlined in our recent article exploring the contrasting strategies of two very similar systems, there are multiple ways to allocate capacity in ERCOT.

In order to compare strategies, let’s look at the average revenues of batteries which:

    Copyright© 2024 Modo Energy. All rights reserved