The Case for Battery Storage in PJM

Over the past year, the outlook for battery storage in PJM has shifted considerably. The capacity market recently cleared at $269/MW-day across the RTO (and more than $440/MW-day in certain geographies) and high prices are expected to continue, sending a clear signal for newbuild capacity resources. Given recent thermal retirement announcements, expected increases in renewable capacity alongside expected load growth, and over 50 GW of nameplate capacity currently in the interconnection queue, battery storage is well-positioned for strong growth in the market. However, the latest regulation market reforms, low current renewable penetration, and declining ELCCs bring added uncertainty for the battery business case in PJM.

In this session, we will dive into our latest market- and asset-level analysis on PJM battery storage and cover the following topics:

• What IRRs can batteries expect across different zones, durations, and CODs?
• How will various revenue streams—ancillaries, wholesale arbitrage, capacity, state incentives—contribute to different battery cases’ economics, and how is that mix shifting over time?
• How will upcoming regulation market reforms and increasing renewable penetration affect battery dispatch behavior and margins?
• What do recent high capacity clearing prices mean for battery revenues? As the resource mix and ELCCs evolve, will these strong battery capacity revenues persist?
• How much interest is there in building battery storage in PJM now, and what portion of the capacity mix are batteries expected to take up over the next 20 years?

If you are interested in joining the session, please reach out to Kyndal Mayes.