In ERCOT, the location of battery energy storage systems can have a huge impact on their energy arbitrage opportunities and revenues overall.
In the first five months of 2024, batteries in the West Load Zone earned an average of $91k/MW annualized compared to just $56k/MW in the North Load Zone.
And this was in part due to higher price spreads in the real time energy market. The daily price spreads in the West hub averaged $211/MWh, whereas the North hub averaged just $182/MWh. This helps explain why more batteries have been built in the West than in any other region in ERCOT. Additionally, batteries in the West Load Zone have longer durations on average, which means they're better placed to take advantage of those arbitrage opportunities.
This has also enabled batteries in the West to allocate more capacity to Ancillary Services with duration restrictions like ECRS and Non-spin. For example, in the first five months of 2024, batteries in the West Load Zone allocated 27% of their capacity into these services, whereas batteries in the North Load Zone allocated just 7%.
Modo subscribers can read the full article now to learn more about how the location of batteries across ERCOT impacts their revenue performance, their operational strategies, and their cycling rates.
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