Modo Energy - USA

The Modo Energy ERCOT Forecast projects revenues for battery energy storage systems out to 2050, customized to your individual battery's specifications. You can customize your battery's rated power, duration, location, round-trip efficiency, cycling limits, and much more. But how does the model actually simulate battery revenues and operations for every 15-minute period out to 2050? The dispatch model uses the market conditions assembled by our production-cost model. This provides real-time energy prices, Ancillary Services clearing prices, and generation output by technology type for every 15-minute period in the forecast. The dispatch model then optimizes battery operations to maximize revenues for a given day, but takes into account the real-world implications of cycling - helping to mitigate the effects of perfect foresight of a day's power prices. To learn more about how the dispatch model provides a realistic picture of battery energy storage revenues in ERCOT, check out the full article for FREE in the comments! #BatteryEnergyStorage #ERCOT #RevenueForecast

The average battery energy storage system in ERCOT earned $46/kW through the end of August. And less than 30% of that revenue was earned in the summer months of June through August. This is in stark contrast to 2023 when over 90% of revenue was earned over the same three-month period. Additionally, total revenue in 2024 is down more than 70% year-over-year from the same point last year. This decline is even more apparent in the summer months, with revenues earned from June through August down around 90% - from $160/kW to $15/kW. Join Quentin 'Q' Scrimshire and Brandt Vermillion in the latest episode of the Transmission podcast, where you'll learn more about what's behind this massive year-over-year difference. #ERCOT #BESSRevenues #PowerPrices

Battery energy storage systems nearly unilaterally offer to provide Ancillary Service capacity in ERCOT at lower prices than other technology types. By the end of July, nearly 5.5 GW of battery energy storage had become commercially operational. And this meant that they provided an average of around 75% of all Ancillary Service responsibility during the evening peak. Energy prices were low in September 2024. In Fact, Real-Time Bus-Average Hub prices averaged just $23/MWh. However, more participation from battery energy storage systems in the Ancillary Service markets - both in terms of offer volume and actual awards - has continued to drive the separation between Ancillary Service clearing prices and Energy prices. In fact, in September, the ratio of average Ancillary Service prices to Day-Ahead Energy prices was also the lowest it had been since batteries entered ERCOT, at around 0.09.

The Modo Energy ERCOT forecast projects the operations and revenues of battery energy storage systems out to 2050. It does this based on the generation, demand, and price calculations made by our production-cost model, for every region in ERCOT and at 15-minute granularity. This model ensures that, for every period of time, generation across all technology types meets forecasted demand with the least-cost dispatch of energy. It incorporates Ancillary Services, generation outages, capacity factors, and more. To learn more in-depth about how the production-cost model works, check out the full article here: https://lnkd.in/gCP2cXSD

In just the last three years, US buildout of battery energy storage capacity has grown by roughly 6x. A majority of this growth in buildout through 2024 has occurred in California and Texas. However, ISOs across the country, namely PJM and MISO, have seen large growth in BESS capacity in their interconnection queues. And by the end of 2030, we project to see roughly 150 GW of commercially operational battery energy storage capacity across the US. Check out our full US buildout report at the link in the comments.👇 #BatteryEnergyStorage #ERCOT #CAISO

We have just released the Modo Energy ERCOT Forecast for battery energy storage revenues, out to 2050. But how does it work? A principal component of our forecast is the production-cost model, which simulates the optimal economic dispatch of generation across ERCOT to meet demand. This is done at 15-minute granularity, all the way out to 2050. This model calculates the price of energy in each region of ERCOT, as well as the generation output by technology type and expected Ancillary Service procurement, for each time step. To learn more about in-depth about how our forecast works, check out the link in the comments!

Batteries are offering enough volume to fulfill the requirements of almost every Ancillary Service in ERCOT - so, are these markets saturated? It's not quite as cut-and-dry as that. As more batteries have come online (around a gigawatt between May and July, and around another gigawatt since), you would expect them to provide more and more Ancillary Services. But battery energy storage participation has basically plateaued. With minimal scarcity conditions (thanks to mild weather and greater solar penetration) and low natural gas prices (averaging $2.11/MMBtu in 2024, so far), Ancillary Service prices have dropped to their lowest-ever levels. In fact, in September, prices fell to an average of $1.93/MW/h. As such, many battery operators are choosing to reserve more capacity for wholesale trading, in Day-Ahead and Real-Time Markets. So, while batteries have undoubtedly pushed prices down in these services - we saw similar system conditions in 2020, but monthly average prices remained above $5.50/MW/h across the year - they haven't yet totally "saturated" these markets, per se. Instead, what we’ve seen is that revenue opportunities for batteries in the Ancillary Service market have gradually declined. And, with this (and batteries continuing to come online at a rapid pace), Energy arbitrage is becoming a more and more prominent component of the BESS revenue stack. #BatteryEnergyStorage #ERCOT #AncillaryServices

In September 2024, Ancillary Service clearing prices in ERCOT averaged just $1.93/MW/h - an all-time low. But how is this affecting battery participation? Since March, the proportion of Ancillary Services provided by battery energy storage has remained pretty constant. This is despite nearly a gigawatt of new battery rated power connecting to the grid between March and July. So, while there are more batteries available to provide these services, their participation has basically plateaued. This suggests that clearing prices have now hit a point - thanks, mostly, to batteries - at which providing Ancillary Services is being seen by many providers as less worthwhile than Energy abritrage. And we see this play out in the revenue stack - with batteries earning around 30% of their revenues in 2024 so far from Day-Ahead and Real-Time Energy markets. But how have batteries pushed prices down in these services? And are they now saturated? In our latest ERCOT deep dive, Brandt Vermillion explains exactly how battery participation in Ancillary Services has shaped prices - link in comments.👇 #ERCOT #BatteryEnergyStorage #AncillaryServices

Modo Energy is hiring - we're looking for Data Scientists who want to work at the forefront of the energy transition. Battery energy storage is being built out across America at a rapid pace - and businesses need to understand the commercial landscape they're operating in. At Modo, we help our users understand past, present, and future revenue opportunities - so that they can build and operate assets with confidence. So, if you're a problem solver who wants to work at the intersection of data science, renewable energy, and finance - this role is for you. If you have Python skills, experience in energy modeling, and a desire to have a tangible impact on the energy transition, get in touch today. You'll be working alongside a fantastic team of people who have built batteries, operated transmission systems, and traded power in real-time markets. So, if you're interested, visit our careers page - or message Nima Tabatabai. #Hiring #DataScience #Energy

In July 2024, battery energy storage systems in ERCOT earned an average of roughly $23/kW (annualized). This was 85% lower than the $152/kW (annualized) revenues that battery energy storage systems earned last year in July 2023. So, what has changed from last July to this July? ▶️ Over 5% decrease in average temperatures ▶️ 13 fewer days that reached over 100°F ▶️ 10% decrease in average daily peak hourly net load ▶️ Increased installed solar generation These changes meant that ERCOT rarely saw large price spikes this July, which ultimately reduced the magnitude of the revenue opportunities available to batteries. Because of this, battery owners and operators had to adapt. In July 2024, around 35% of revenues were earned from Energy markets, and 19% were earned in the Day-Ahead Energy market, specifically. This marks the first month in which battery revenues earned from Day-Ahead Energy exceeded the revenues earned from Real-Time Energy. This trend occurred because Day-Ahead price spreads in July were consistently larger than Real-Time spreads, so optimizers began shifting their operational focus onto selling energy in the Day-Ahead market, rather than simply waiting to be dispatched in the Real-Time market. What else do you need to know about battery energy storage performance in July 2024? ▶️ Individual battery performances ▶️ Ranked owner portfolio revenues ▶️ Impacts on cycling rates so far in 2024 Check out our July 2024 ERCOT Benchmark Report from the link in the comments to learn more. #BatteryEnergyStorage #ERCOT #Benchmark