Tyba

Curious what it takes to keep energy storage assets optimized and profitable in one of the most dynamic #PowerMarkets? From planning an approach in the day ahead to real time adjustments based on evolving price forecasts and an asset’s state of charge, storage operations can be all-encompassing. Here is a peak at what a day-in-the-life of a #BESS operator in #ERCOT looks like – and how advanced technology can support operating excellence, and scalability.

It is no secret that #ERCOT is one of, if not the, most lucrative markets for #energystorage operators. But it is also one of the most complex. In the hopes of smoothing the path for more storage asset operators, we've created a series of foundational resources to help: ?? Break down the market ?? Overview the path to bring an asset online ?? Share details on winning operating strategies? ? Outline recent regulatory changes Is there a specific topic you hope we cover? Drop it in the comments or send us a message!

We’ve been powering up our partnership with TotalEnergies through the #TotalEnergiesOn accelerator program the past few months ? Since the kick-off at #StationF in Paris, we’ve been hard at work to ensure our platform supports developers and operators of energy storage projects across the globe. A few noteworthy enhancements: ?? We've expanded our offering into high potential international markets – across the EU, AUS, and beyond ?? We’re continuing to increase product flexibility so mature trading teams have the controls they want/need Big thank you to the whole team – for your support in the creation of this video with Tom Thunell, connections to experts in your network, and advice as we continue to enhance our offering.

There have been a handful of announcements featuring longer duration #BESS assets in #ERCOT rolling out the past few weeks. The trend piqued our curiosity – what incremental value might operators be able to unlock from increasing battery size/duration? ????????????????????: ? First tranche of batteries in ERCOT deployed 3-4 years ago were predominantly 1-hour duration and bid exclusively into RRS ? In the last year or so, we have seen a shift towards slightly longer duration (1.5 to 2-hours) ? CPS and Eolian announced a partnership last week, and are developing two projects totaling 350 MW with a 4-hour duration (COD by mid 2026) ???????? ?????????????????? ?????????? ???????????? ?????? ???????????? ???????????????? ?????????????????? ???? ??????????? It may make sense, depending on your objectives! With the shifts towards more revenue coming from energy arbitrage, the 4-hour duration helps future-proof revenue and unlock an operator’s ability to execute more complex bidding strategies. ???????????? ???????? ???????????? ??????: Key takeaway: Based on real time price spreads (TB2 vs. TB4), for key hubs in ERCOT, you would need to double your duration from 2- to 4-hour to achieve 50% more revenue.? ? TB2: Top 2 priced hours less bottom 2 priced hours each day ? TB4: Top 4 prices hours less bottom 4 priced hours each day ? Intuition: The largest spread will always exist between the top priced hour and bottom priced hour on a given day, and diminish as you work inward from there ?????????????? ????????????????: A 4-hour duration could provide a higher annual revenue opportunity - and allows the optimizer to derive more complex bidding approaches. For example, in 2023, a larger percentage of revenue would have come from Real Time Energy and ECRS. And a smaller percentage from Reg Down and Reserves. This was especially pronounced in August, an incredibly high revenue month in ERCOT. Since the longer duration gives an asset more “at bats,” the likelihood of hitting peaking hours increases. And even if they are close in time to each other, or existing AS obligations, an asset would not be at risk of running out of #energy.? As with all things, the optimal battery size for your project will depend on the details (ie. node, objectives, etc.). Other benefits we would consider include: ? Allowing more flexibility to bid into Non-Spin (4 hour duration) and future market products (such as DRRS) that have a longer duration requirement? ? Protect against evolving SOC regulations (ex. NPRR1149 and 1186) ? Continued cost declines prior to COD ? In specific instances, corporate or LSE offtakers (like CPS) that have some operational challenge where the cost/benefit of longer duration BESS makes business sense

Batteries are critical to ensuring a successful #energytransition – and software is the way to ensure these assets operate profitably. The need for advanced technology to optimize #BESS asset operations is only heightening as markets evolve and become more competitive. Those who rely on manual dispatch will require large teams to constantly monitor markets and update bid submissions – still to end up behind those who incorporate automated, software-driven approaches. An advanced optimizer can help operators develop and execute more nuanced strategies, factor in physical asset constraints and market rules, manage risk exposure, automate SOC management, and so much more. Thanks for including us Energize Capital!

To cycle or not to cycle… ?? It is a question we have been hearing from storage asset operators a lot in recent months. We are all aware that not all cycles are created equal - but how can you accurately evaluate the tradeoffs? We configured a sample evaluation that showcases four different warranty/operating constraints and corresponding cycling & revenue outcomes. What does that mean for #energystorage operators? Depending on whether your aim is to maximize total annual revenue or dollars per cycle, the answer will vary! Either way, it is critical for storage operators to hone in on their strategy and configure their optimizer accordingly.

Two key shifts noted in the #CAISO 2023 Special Report on Battery Storage, released last month, demonstrate why State of Charge (SOC) management is critical for successful storage asset operations ? ?? 1?? CAISO has amped up Ancillary Service State of Charge (ASSOC) requirements. Assets must have 0.5 hours of energy in the tank for RegUp obligations, and 0.5 hours of headroom for RegDown by the start of the relevant operating hour.? 2?? Adjustments to Bid Cost Recovery (BCR) payments mean operators will no longer receive payments when they do not have sufficient energy to deliver on their obligations. For #energystorage operators, this means that optimizing across revenue generation activities and the physical constraints of your asset is no longer a nice to have. Are your planning and optimization tools up to the task? Do they… ??♂? Account for AS deployment uncertainty? ? Programmatically adjust your operating plan to ensure ability to deliver on obligations? ? Effectively balance DA bid plans and RT operations with AS market impacts?

?? Summer is starting to heat up in Texas ?? Temperatures have consistently exceeded 100° this week, causing sustained periods of 80GW+ of demand on the grid. While #ERCOT has had more robust operating reserves that have proven to keep prices lower than the August 2023 heatwave – the past few days have still been valuable for operators, with Day Ahead (DA) energy prices exceeding $800 on 8/6, and Real Time (RT) #energy prices above $1000 on 8/7. This got us thinking about what operators did last August. We found that they fall into one of two categories: 1?? Ancillary Services (AS) Focused: The majority of operators fall into this category. They run a similar strategy, bidding predominantly into 'up' products, day-over-day. While this can return high revenue on days where capacity is wanting (assuming no failure to provide penalties), it leaves little room to capitalize on the energy market. 2?? Balancing Energy with AS: Assets that performed best throughout the heatwave adjusted their daily strategies, balancing AS with energy arbitrage. With the relatively lower prices so far this season, a dynamic approach that balances energy (DA and RT) with AS may be the winning formula.?

We’re less than a year out from NYSERDA’s first Index Storage Credit (ISC) solicitation. How can you develop a competitive, but lucrative bid? ????????????????????: New York’s 6GW #storage roadmap, approved by PSC last month, includes a mechanism to mitigate merchant risk for utility-scale storage assets – the ???????????????????? ?????????????? ???????????? (??????). This credit is calculated based on the difference between: - Strike price: a value that you develop and bid into NYSERDA’s competitive solicitation - Reference price: A value calculated retrospectively by NYSERDA, meant to represent a market benchmark of wholesale value ???????????????? ???????? ??????:? To be successful in NYSERDA solicitations, bids must be low enough to compete. For effective downside protection, bids must be high enough to deliver on a project’s IRR goals. The first step in threading this needle is honing in on your asset’s expected wholesale market revenue, as well as the expected Reference Energy Arbitrage Price (REAP). You likely want the delta between your wholesale market revenue, and the revenue target needed to hit your IRR hurdle to be covered by your monthly ISC payment (ie. the strike price you are trying to determine less the reference price).

VDER was designed to both accelerate grid #decarbonization – and deliver value to the energy producers doing it. But, how can you ensure you’re maximizing the value of your assets? ?? Simulate project returns using an operating strategy that aligns with VDER incentives (for example, prioritizing hours that align with DRV and ICAP windows)? ??? Compare across all territories to understand how the differing rates may impact project outcomes ??? Design your project and develop an operating strategy to maximize VDER project value, and adhere to utility charging restrictions