Modo Energy - USA

Want to stay up-to-date on all things happening in ERCOT battery energy storage markets? Sign up for our free weekly newsletter for a concise update on Modo's latest research and new market developments in ERCOT. This week's newsletter featured: - An analysis on the record-setting battery energy storage output on August 19th and 20th. - As well as a deep dive into how the location of a battery impacts its revenues, capacity allocations, and cycling rates. Subscribe here: https://lnkd.in/gRCtCpgP

Why are West Texas batteries making more money than anywhere else in the state? The answers might surprise you. Battery energy storage systems in Texas are seeing wildly different revenues so far in 2024, depending on where they’re located. Batteries in the West Load Zone are outperforming those in the North by a staggering 62%. What’s driving this? West Texas, rich in wind and solar, offers larger intraday price spreads than other regions. Batteries here capitalize on these spreads, charging when energy is cheap (midday, thanks to abundant solar) and discharging when it’s expensive (evening, during the net load ramp). But it’s not just about timing. West Texas batteries also have longer durations, giving them an edge in both energy arbitrage and Ancillary Services. The combination of favorable price spreads and smart capacity allocation is why batteries in west Texas have been extremely successful in 2024. Check out the full article to learn more about how revenues, operational strategies, and cycling rates vary across different locations in Texas: https://lnkd.in/dcT2wuZR

So far in 2024, 26% of battery energy storage revenues in ERCOT have been earned via Energy arbitrage - up from just 15% in 2023. As the buildout of batteries in ERCOT has continued, Ancillary Service prices - relative to Energy prices - have declined. With increased competition in the Ancillary Service markets, more battery energy storage capacity is available for Real-Time Energy dispatch. With more capacity available in Real-Time, batteries have consistently provided more output to the grid. In fact, in the most recent thirty days of operations, the peak 15-minute total net output of all battery energy storage systems averaged nearly 1.5 GW. This marks an increase of more than 4x from the same time last year, when the peak 15-minute total net output of all battery energy storage systems averaged less than 400 MW. And this is in spite of the fact that Real-Time Energy prices averaged just $26/MWh in the most recent 30 days of operations. This is a 69% reduction from the average of $84/MWh over the same period last year. So, why is the peak net output output of battery energy storage increasing, despite prices declining? Modo Energy’s ERCOT subscribers can read the full article to learn more about: ▪ How battery energy storage Energy Offer Curves compare to other technology types. ▪ The differences in Energy Offer Curves among different battery energy storage owners. ▪ And how those offer curves have changed since last year.

Key Capture Energy's battery portfolio in ERCOT outperformed all other battery energy storage systems by 54% in May 2024. However, this outperformance has not always been the case. Prior to the launch of ECRS in June 2023, Key Capture Energy's battery portfolio consistently underperformed the rest of ERCOT, averaging 48% underperformance in January through May 2023. Following the launch of ECRS, Key Capture has averaged an 8% outperformance over the past twelve months. And most notably, in April 2024, Key Capture Energy's battery portfolio began allocating larger proportions of its capacity to Non-Spinning Reserve Service (Non-Spin). This Ancillary Service proved to be highly lucrative in both April and May 2024, leading to this impressive outperformance. To learn more about Key Capture Energy's battery energy storage portfolio in May 2024, including performance breakdown, operational strategies, and cycling rates, check out the full article now: https://lnkd.in/g_V9neAi #BatteryEnergyStorage #ERCOT #KeyCaptureEnergy

Modo energy predicts that battery energy storage systems in ERCOT could reach a total rated power of 18 GW by the end of 2025. This is more than 3x the current total of 5.3 GW of battery energy storage on the system. This growth is a result of many factors: - In July 2024, over 600 MW of battery energy storage projects received approval to synchronize to the ERCOT grid. - Also in July 2024, nearly 350 MW of battery energy storage projects received approval to energize their substation. - Currently, there are a total of 3.8 GW of battery projects in development that have at least received approval to energize. To learn more about the stages of battery energy storage development in ERCOT, and the total projected growth of battery rated power over the next 18 months, check out our ERCOT Buildout Report: https://lnkd.in/dW2f8JPZ #BatteryEnergyStorage #ERCOT #Buildout

In May 2024, Key Capture Energy owned all three of the highest-earning battery energy storage assets in ERCOT. The majority of its ten sites outperformed Modo Energy’s ERCOT BESS Index in May. In fact, Key Capture’s portfolio earned 54% higher per-megawatt revenues than other batteries in ERCOT (on average). The high revenues those batteries achieved in May 2024 are striking - particularly compared to historical performance. Prior to June 2023, Key Capture Energy’s portfolio consistently underperformed other batteries in ERCOT. But, following the launch of ECRS, Key Capture Energy's batteries began performing better, relative to other systems. They earned roughly $233,000/MW (annualized) in May 2024. Therefore, the portfolio outperformed other batteries in ERCOT, on average, by around $81,000/MW/year. And this difference in revenues came entirely from ECRS and Non-Spinning Reserve. Modo Energy’s ERCOT subscribers can read the full article. Learn about Key Capture Energy’s: ▪ Revenue breakdown - which markets and services contributed to its May revenues? ▪ Capacity allocation - which operational strategies did its batteries utilize, and how did this compare to others sites in ERCOT? ▪ Cycling rates - how many cycles did Key Capture’s batteries perform to earn these revenues? #BatteryEnergyStorage #ERCOT #AncillaryServices

"That's where I see ERCOT moving - to real-time co-optimzation, which I think will create a more efficient market from an Ancillary Service perspective." On the latest episode of Transmission - Modo Energy's weekly podcast - Quentin talks with Gary Cate (Director of Energy Market Analytics, Fluence). Over the course of their conversation, they cover: ▪ Key differences in market designs across different RTOs and ISOs in North America. ▪ The intended goals of ERCOT's unique market design. ▪ The key considerations as more renewables connecting to the grid. ▪ And current policy hot topics for battery energy storage developers, owners, and financiers. You can listen to this interview - and every previous episode of Transmission - on your favorite podcast app. 🚨 If you know somebody who would make a great future guest, let us know! Send a message to Ysabelle Swan, our Producer, to get the ball rolling. 🚨 #BatteryEnergyStorage #RenewableEnergy #Transmission #Podcast

Which battery energy storage owners are driving Ancillary Service prices in ERCOT? Batteries have become the dominant provider of Ancillary Services in ERCOT. In fact, in the month of May, batteries provided 42% of all volume offered into Ancillary Service markets. This rises to 58% if excluding Non-Spin, the only service with significantly less than 50% of volume offered by batteries. And the prevalence of batteries in these services helps to explain why prices have been decreasing (relative to Energy prices). Batteries are now also consistently offering well over 100% of the procured volume for Responsive Reserve (RRS) and the Regulation services. In May, battery energy storage systems also offered around 89% of the procured volume for the ERCOT Contingency Reserve Service (ECRS), on average. Naturally, the asset owners that have the most installed rated power tend to provide the most offer volume. But simply looking at offer volumes doesn’t tell the full story. To understand how asset owners contribute to Ancillary Service price formation, we need to look at the distributions of their offer prices. In ECRS, some battery energy storage owners clearly offered in as ‘price takers’. This means they were willing to carry responsibility for the service, almost regardless of the price they would receive. These ‘price takers’ included: Jupiter Power, Aypa Power, and Hunt Energy Network. Each of these owners offered at least 75% of their volume at prices below the median ECRS clearing price of $2.99/MW/h in May. Conversely, Eolian and Plus Power acted more as ‘price setters’. Eolian often offered at lower prices, close to the clearing price, suggesting they helped lower clearing prices (while still receiving ECRS awards at a higher price than other owners were willing to take). Plus Power's offer prices closely matched the clearing price distribution. However, their median offer price was 67% higher than the median clearing price - which indicates they were less likely to exert downward pressure prices than other owners. To find out more, head to article. Link in comments.👇 #BatteryEnergyStorage #ERCOT #AncillaryServices

Battery energy storage systems now provide nearly half of all Ancillary Service offer volume in ERCOT. And some owners in particularl are offering up a massive proportion of this by themselves. This means that batteries are now having a huge influence on clearing prices. But which owners are acting like 'price-takers', and which are acting more like 'price-setters'? Find out more: https://lnkd.in/ePEXBB2s #BatteryEnergyStorage #ERCOT #AncillaryServices

In May, battery energy storage systems in ERCOT earned $158,000/MW - the highest monthly revenues for batteries since September 2023. Record-high proportions of revenues came from Non-Spin, and there were plenty of lucrative ECRS opportunities. On average, longer-duration systems (1.5+ hours) two-hour earned 28% higher overall revenues than shorter-duration batteries in May. This revenue difference came from higher earnings in ECRS, Non-Spin, and Energy arbitrage—markets in which longer-duration systems have an inherent advantage. Despite this, the top three performing assets in May (based on $/MW revenues) were actually one-hour systems - the first time this has happened in 2024. Modo's ERCOT subscribers can read the full article now - to find out which assets and owners performed best across May. Also, find out what provisional estimates for June and July revenues look like in the video below. #BatteryEnergyStorage #ERCOT #BESSIndex