Regulation has consistently been the most lucrative path to revenue for batteries in PJM since the first one began operations.
Over the past three years, Regulation has consistently cleared above Synchronized and Primary Reserves - and at times, even rivaled Real-Time Energy prices during high-volatility periods.
This has been a major reason behind Regulation becoming the go-to market for most new battery energy storage systems (BESS) in PJM. Alongside its lucrative clearing prices, Regulation has a predictable dispatch profile and allows batteries to stack capacity commitments - and therefore revenues - across consecutive hours, enabling higher revenues than the one or two cycles Energy arbitrage allows on most days.
Average battery energy storage system (BESS) revenues in PJM reveal that Regulation and Frequency Response drive the majority of earnings.
Through Q1 2025, the 19 batteries that reported their earnings in the Federal Energy Regulatory Commission’s Electric Quarterly Reports earned an average of $832/MW-day, equivalent to $304/kW-year, with 86% of that coming from Regulation.
During January 21 - 23, battery earnings surged past $3,000/MW-day as PJM faced its coldest day in nearly a decade. The cold snap drove record demand and high real-time prices, boosting Regulation revenues significantly.
But what happens when too many batteries chase the same, fixed pool of value?
That edge may not last much longer.
This article explores a critical question for BESS developers, investors and optimizers:
Is PJM’s Regulation market already saturated - and if not, when will it be?
Contact the US Research team at brandt@modoenergy.com or deeksha@modoenergy.com with any questions in the article. To learn more about becoming a subscriber to Modo Energy’s research and continue reading, click here.