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Battery Economics in CAISO & ERCOT

CAISO and ERCOT are two of the most attractive battery markets in the United States

  • In CAISO, resource adequacy (RA) makes up a material part of the revenue stack and drives investment into longer duration (4+ hour) assets
  • In ERCOT, we find 1-2 hour batteries to be optimal, with a shift over time from Ancillary Service revenues to a business model focused primarily on energy arbitrage
  • Key risks and sensitivities include (among other things) weather, battery costs and speed of deployment, locational pricing, policy, and degradation
  • Integrated modelling of energy market, ancillary service market, capacity market, and nodal price outcomes is critical for understanding battery storage project economics

Aurora’s Flexible Energy Add-On gives developers, asset owners, and investors everything they need to build and assess battery investment cases through:

  • Granular forecast data – Hourly and sub-hourly energy and ancillary service prices
  • Competitive analysis – review of historical battery performance for all operational assets to help analyze the competitive landscape
  • Strategic analysis – regular updates of key policy impacting storage, scenario analysis, and key risks/sensitivities
  • Investment cases – regular updates to 54+ standard investment cases for different project durations, locations, commissioning dates and market scenarios

Click below to download a redacted sample of the report, and we will follow up with you about the full report:

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