Modo Energy - USA

The Modo Energy ERCOT Forecast is built upon two primary components - the production-cost model and the dispatch model. Together, they project both market prices and dispatch, as well as simulate realistic battery revenues and operations, out to 2050. To do this, the model accounts for certain macro assumptions based on historical data - one of which is generation outages. Historically, generation outages have tended to occur more frequently in the shoulder months of spring and fall. This is most notable for thermal resources, such as Natural Gas and Coal, which typically schedule maintenance during these seasonal periods. To learn more about how the forecast implements macro assumptions such as outages, long-term demand, capacity buildout, and more, check out the full article on our production-cost model in the comments below! #ERCOT #BatteryEnergyStorage #Availability

Battery energy storage revenues in ERCOT, from January through August 2024, are down more than 70% year-over-year from the same period in 2023. And the revenues earned in June through August of this year are down more than 90% year-over-year, from $160/kW in 2023 to $15/kW in 2024. So what made this summer so much milder for battery energy storage revenues? Check out our recent episode of the Transmission Podcast to learn more about how the ERCOT markets are evolving with the rapid growth in battery energy storage buildout - by clicking the link in the comments. #ERCOT #BESSRevenues #PowerPrices

The Modo Energy Forecast for battery energy storage revenues in ERCOT simulates battery operations out to 2050. It does this using the dispatch model, which allows for the customization of a battery's specifications (i.e. rated power, duration, location, round-trip efficiency, and more) and projects future performance in terms of both revenues and cycling rates. But how does the dispatch model provide realistic performances? The dispatch model optimizes a battery's economic dispatch for every 15-minute period, based on projected clearing prices of Ancillary Services and projected energy price spreads. In its operational decision-making, it accounts for specific real-world limitations. It accounts for daily and yearly cycling limits, as well as the cost of cycling a battery. Because of this, it also values Ancillary Service clearing prices in combination with their respective historical activation rates. And when the dispatch model was implemented on the first five months of 2024, the revenue performance for a simulated one-hour battery earned revenues that would rank in the 65th percentile of all one-hour batteries in ERCOT. And the revenue breakdowns by market for the dispatch model's simulated battery aligned with the revenue proportions of all batteries across ERCOT - with the dispatch model earning higher overall revenues in energy arbitrage. To learn more in-depth about how the Modo Energy Forecast can provide realistic projections of battery energy storage revenues for a battery in ERCOT, check out the full article for FREE below in the comments. #BatteryEnergyStorage #ERCOT #RevenueForecast

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