In July 2024, battery energy storage systems listed on Modo’s ERCOT BESS Index earned average revenues of $23/kW (annualized). July is the last full month for which ERCOT's market disclosure data exists (it is published 60 days after the fact).
$23/kW/year represents a 67% decrease from the first half of 2024. May remains the most lucrative month of 2024 to date - with average revenues of $157/kW/year.
July, on the other hand, was the second-lowest month for average battery revenues in 2024 so far. This is despite summer historically being a period of higher revenues for battery energy storage systems in ERCOT.
Monthly revenues were 85% lower than in July 2023 - when batteries earned $152/kW/year, predominantly from Ancillary Services (including the then newly launched ECRS service).
As was the case in June, system conditions this July have been drastically different from 2023.
Power prices in July 2024 were significantly lower than in July 2023, due to:
- Lower average temperatures (~5% decline) - resulting in a 8.1% decrease in average daily peak demand.
- Substantial growth in solar generation (around 9 GW more installed capacity, and 36% higher peak hourly solar generation).
- Reduced net load (particularly during the highest-priced hours of the day, between 6 and 9 PM).
In the evenings, when the sun sets and net load typically peaks, the lower temperatures and decreased actual demand resulted in a 10% decline in average daily peak net load.
Additionally, the increase in installed battery energy storage capacity also meant an increase in available fast-responding resources.
The combination of these factors resulted in lower average price spreads, and therefore reduced revenue opportunities for batteries.
How are battery energy storage operations evolving alongside these system changes?
With these complex market forces, we have begun to see batteries participate more heavily in Day-Ahead Energy markets. July 2024 marks the first month where average battery revenues in Day-Ahead Energy surpassed those earned in the Real-Time market.
This is, in large part, due to the fact that the Day-Ahead Market consistently produced higher spreads than the Real-Time Market in July.
And the overall growth in the proportion of revenues earned from energy markets is especially apparent when looking at the performances of individual sites.
The top ten performing sites in July 2024 earned more than half of their revenues from Energy markets.
Sites with large negative Real-Time Energy revenues also tend to have large positive Day-Ahead revenues. These sites are likely performing DART optimization on many days.
This allows them to collect the difference between Day-Ahead Energy prices and Real-Time Energy prices when selling energy in the Day-Ahead Market, then electing not to actually discharge in the Real-Time Market. Typically, this is done when Real-Time prices are below the energy price that a resource sold power at in the Day-Ahead Market.
You can read more about Day-Ahead/Real-Time optimization in our explainer here.
Subscribers to Modo’s ERCOT products can continue reading below. Find out:
- Which specific battery energy storage systems outperformed the Index in July.
- How the portfolios of ERCOT’s largest battery owners performed.
- And how battery operations have evolved during milder system conditions.
Which battery energy storage systems achieved the highest revenues during this lower-earning month?
The ten highest-earning batteries in July 2024 - all of which earned a majority of their revenues from Energy markets - were sites owned by Jupiter Power or Hunt Energy Network. These owners both have a strong track record of battery revenue performance so far in 2024.