Modo Energy - USA

ERCOT’s 2024 power market saw a sharp decline in volatility, ultimately resulting in narrowing daily price spreads and therefore Energy arbitrage opportunities. Real-Time around-the-clock Energy prices fell by 46%, while Day-Ahead prices fell by 49%, year-over-year. Some other key developments included: • average top-and-bottom one-hour (TB1) spreads declined by 61%, limiting arbitrage opportunities, • Ancillary Service prices fell to one-third of 2023 levels, driven by reduced energy market volatility and increased battery participation, • peak price hours completed the shift from peak demand hours to peak net load hours, • and transmission congestion continued to drive significant price variation across the system, resulting in the West Load Zone offering the highest price spreads. Beyond these system-wide trends, nodal price dynamics tell a more nuanced story. Variability in locational spreads highlights the interplay between transmission constraints, renewable penetration, and demand patterns. Certain nodes provided consistent arbitrage value, while others exhibited extreme volatility—creating both opportunity and risk for market participants. Check out the article in the comments for an examination of how power prices in ERCOT evolved at the system, zonal, and nodal level in 2024. Also, learn about the locations that presented the highest revenue opportunity to battery energy storage systems in 2024. #ERCOT #PowerPrices #Congestion

February 19th and 20th have once again brought below-freezing temperatures to the ERCOT footprint. Demand has risen to record levels, with the morning of February 20th resulting in a new record peak net load of 71 GW. ERCOT successfully navigated this period of challenging operations, and system prices have yet to exceed $1,000/MWh on either day in either the Day-Ahead or Real-Time Markets, indicating that the system has been relatively stable. This is in large part down to the continued deployment of battery energy storage systems in ERCOT. Batteries were dispatched to provide a record 4.5 GW of Energy on the morning of the 20th, and were likely able to secure large Day-Ahead Market arbitrage opportunities when prices rose above $800/MWh across many parts of the system. This deployment of more storage capacity in the Energy markets allows ERCOT to navigate the challenging solar ramp periods in the morning and evening associated with relatively extreme periods of cold weather. Additionally, minimal generation outages across the system helped keep the power markets in Texas relatively stable over the last two days. Total thermal and intermittent generation outages were around 15 GW over the course of each day, as most resources were able to stay online and contribute to meeting system demand. #ERCOT #PowerPrices #WinterStorm

Higher wind generation in Texas drives price spreads down in the Winter months, leading to lower battery revenues. Usually power prices are higher in the evening to match rising demand, which is when resources sell energy. “But by providing cheap electricity in the evening hours, wind is dispatched in place of thermal generators - suppressing evening price spikes.” And with the milder weather leading to falling demand, these Net Load ramps are much smaller, with last November seeing average Net Load fall by 12% compared to the previous month. This is why energy revenues for batteries fell despite 13.6 GW of dispatchable capacity offline for planned outages last November. Not all batteries are doing poorly though. Access the full article to find out which sites still managed to earn as high as $81k/MW/year in November despite these conditions. Link in the comments #ERCOT #BatteryRevenues #November2024

Real-Time Co-Optimization is likely the biggest market design change in ERCOT since the transition from Zonal to Nodal pricing more than a decade ago. It promises to make the ERCOT market more efficient and reduce overall costs, while also reducing complexity for market participants. Check out the video below and head to the article in the comments to learn more. #ERCOT #RTC #PowerMarkets

Modo Energy’s ERCOT BESS Index showed average grid-scale batteries earned $33/kW/year last November, but four assets under one owner outperformed the rest of the fleet by earning revenues as high as $81/kW/year Normally, when ERCOT enters the shoulder period of the windier winter months, battery revenues drop as price spreads fall. Combined with saturation in the Ancillary Service markets, batteries could have earned much less than they did. So where did batteries make their revenues in November? There were two real-time price spikes on the 10th and 17th of November, when energy prices across the network rose to the $5,000/MWh cap. The assets that topped the leaderboard for the month were the ones that could take advantage of these circumstances and position themselves to discharge at the times when prices were at their peak for the day. This kind of Real-Time Energy arbitrage has become a major source of revenue for the past three months. And as the dynamic of battery revenues in Texas continues to shift, it’s clear some sites are implementing strategies that take them above everyone else. Check out the full article in the comments to find out which owner's strategies have been leading the way for grid-scale battery energy storage in ERCOT, and how revenues in November eventually played out. #ERCOT #BatteryRevenues #RealTimeEnergy

Modo Energy recently landed in Australia, and we'd like to introduce our new battery energy storage revenue benchmark for the country's National Electricity Market (NEM). The ME BESS AUS NEM Index tracks the revenue performance of grid-scale battery energy storage, providing a clear and independent benchmark to navigate this rapidly changing market. Built on a transparent, standardized methodology, the ME BESS AUS NEM Index provides an independent, reproducible view of battery revenue performance. ◾ Five-minute revenue tracking, available at day +1 - covering energy trading and FCAS services. ◾ Marginal loss factors (MLFs) applied - reflecting real-world pricing impacts. ◾ Fully Independent - using publicly available AEMO data. The new ME BESS AUS NEM Index is now available to view on the Modo Energy Terminal - just click the link in the comments below.

In November 2024, for the first time ever, battery energy storage systems in ERCOT earned most of their revenue from the Real-Time Energy market This was driven by spikes in the Real-Time Energy price on November 10th and 17th, which caused prices across the system to rise to the $5,000/MWh cap  However, despite these spikes revenues in November were still down by 20% compared to October, with the average battery earning $33/kW/year This was half the year-to-date average between January and October, and much lower than the $47/kW/year seen a year earlier in November 2023 Fundamentally, these lower revenues were the result of falling Day-Ahead Energy price spreads as ERCOT entered the windier Winter months, saturation in the Ancillary Service markets, and Real-Time dynamics that meant only some assets managed to secure outsized revenues when Real-Time prices spiked Read the November 2024 ERCOT Benchmark report to dig deeper into the system conditions that drove down revenues, and find out which assets and operators were able to earn up to $81/kW/year despite these scarce conditions Link in the comments #ERCOT #BatteryRevenues #PowerMarkets

The best connections happen beyond the conference room. Are you heading to the ERCOT Market Summit in Austin, TX at the end of February? Modo Energy is hosting an exclusive After-Summit Mixer for industry professionals like you. 📍 The Stay Put - Austin, TX 📅 Wednesday, February 26th | 6:30pm onwards Join us for an evening of great conversations, free drinks, delicious food, and exclusive energy storage t-shirts for attendees. Sign up here 👉 https://lu.ma/sd7afzct Secure your spot now and be part of the energy market’s best after-hours gathering. #ERCOTMarketSummit #EnergyNetworking

The core component of the implementation of Real-Time Co-Optimization (RTC) is that ERCOT will begin to award Ancillary Service responsibility in the Real-Time Market in addition to the Day-Ahead Market. In a recent study, ERCOT found that RTC could have saved nearly $6.5 billion across the 12-month period from June 2023 through May 2024 - representing a 19% decrease in total costs. And, across a less volatile period (September 2023 through August 2024), RTC would still have saved $2.4 billion - or 13% of total system costs. Head to the article in the comments to learn more about how: -the Real-Time Co-Optimization of Energy and Ancillary Services reduces system costs, -the system operations timeline changes for market participants, and how ERCOT’s systems change to accommodate RTC, -to interpret the options for ERCOT’s Ancillary Service Demand Curves, -and to anticipate the timeline for implementation of RTC. #RealTimeCoOptimization #ERCOT #PowerMarkets

Commodity markets are often misunderstood—opaque, complex, and heavily influenced by regulation, liquidity constraints, and global supply chains. But what role do interdealer brokers play in facilitating large-scale transactions and ensuring market stability? This week, Quentin 'Q' Scrimshire is joined by Campbell Faulkner, Senior Vice President and Chief Data Analyst at OTC Global Holdings. With decades of experience in commodity trading, market structure, and risk management, Campbell shares his insights on the shifting role of interdealers, the impact of market regulation, and the trends shaping global energy and power trading. In this episode, Q and Campbell discuss: -The role of interdealer brokers in facilitating large commodity transactions. -How market liquidity, volatility, and regulation shape trading strategies. -Why over-the-counter markets remain critical for managing risk in energy and commodities. -The impact of electrification and data center growth on power markets. -And Campbell’s contrarian take on the future of net-zero policies and energy infrastructure. You can listen to this episode - and every previous episode of Transmission - on your favorite podcast app or on the Modo Energy terminal. #ERCOT #LoadGrowth #PowerMarkets