ERCOT: Revenues up 56% for battery energy storage systems

Battery energy storage revenues in ERCOT are up 56% from this time last year. Between January 1st and May 10th 2024, battery revenues averaged over $26,000/MW.
On Thursday May 30th, Modo Energy will launch its BESS Index “nowcast” - as part of our Benchmarking Pro ERCOT products. Subscribers will be able to stay up to date with the latest estimated battery energy storage revenues.
This 56% year-on-year increase in revenues is a clear indicator of the increasing volatility and opportunity in Texas's energy market.
The top six battery energy storage revenue days of 2024 are higher than any day of revenue during the same period last year.
The bottom 41 revenue days of 2024 are lower than any day of revenue during the same period last year.
The driving force behind this surge in extreme highs and lows? As more renewable power and more dispatchable load resources connect to the grid, the periods of low (less than 20 GW) and high (more than 40 GW) net load become more frequent.
Take May 8th. Large net load ramps and shoulder season thermal outages pushed daily revenues to their highest level since September.
In 2023, battery energy storage systems earned 91% after May 10th.
This culminated in average annual earnings of around $196,000/MW last year.
If this trend were to continue in 2024, revenues would hit more than $289,500 per MW.
However, this scenario is unlikely. The record-breaking summer of 2023 provided prolonged high-revenue opportunities from June to September. This pattern may not repeat this year.
Additionally, the saturation of Ancillary Services is putting downward pressure on clearing prices in some markets.
Note: Due to the 60-day lag in ERCOT publishing its market disclosure data, the revenue figures provided here are provisional estimates and subject to change.
Readers are advised that these estimates should not be relied upon for making financial or investment decisions. Actual battery energy storage revenues may differ.
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