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Summer revenues for BESS in ERCOT with Brandt Vermillion (ERCOT Market Lead @ Modo Energy)
Oct 24, 2024
Brandt Vermillion, ERCOT Market Lead at Modo Energy, shares vital insights into Texas's energy landscape. He discusses the staggering drop in battery revenues from 2023 to 2024, influenced by increased competition and a boom in solar energy. The conversation highlights the significance of summer months historically, the innovative DART trading strategy for enhanced revenue, and the complexities of revenue volatility amidst changing market dynamics. Brandt sheds light on the evolving relationship between energy storage and ancillary services, making for a compelling listen.
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Quick takeaways
- Battery energy storage revenues in ERCOT plummeted 85% in June 2024 due to increased competition and market saturation impacting profitability.
- The emergence of tolling agreements highlights battery operators' need for secure financial strategies amid declining revenues and evolving market dynamics.
Deep dives
Significant Changes in Battery Revenue
Battery energy storage revenues in Texas experienced a drastic decline in June 2024, falling approximately 85% compared to the previous year's exceptional summer. Last year, a hot summer with tight power supply led to remarkable revenues for battery operators, with around 75% of earnings generated during that season. In stark contrast, this year's summer did not replicate the previous volatility, resulting in average battery earnings dropping to about $60,000-$70,000 per megawatt from last year's $200,000. The lack of extreme market conditions significantly impacted the profitability of battery storage systems this summer.
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