Grid-scale battery developers in the United States face different revenue risks in the Electric Reliability Council of Texas (ERCOT) and the California Independent System Operator (CAISO) markets, with ancillary market saturation compressing revenues in Texas.
Developers around the United States are increasingly taking note of the vast benefits offered to batteries in two of the largest wholesale markets in the United States: the CAISO and the ERCOT.
Still, the uptick in interest is pushing both markets closer toward saturation and raises the question of whether battery developers will be able to capitalize on ancillary service revenues in the months and years to come.
According to Evelyne Ruiz-Olivo, a market analyst at Amperon, the impact of that saturation looks quite different in both markets, though the differences stem less from technology or battery behavior and more from the market structures themselves.
In ERCOT, she explained, the energy-only market means that while there are fewer overlapping revenue streams, development timelines are faster and payouts depend heavily on the market.
“Batteries rely more heavily on arbitrage and ancillary products,” she told pv magazine USA. “Without resource adequacy payments, revenues are more exposed to volatility.”
