Batteries are well suited to provide Ancillary Services because they can act as both loads and generators, they can ramp up and down near-instantaneously, and they have a relatively low marginal cost to operate. Historically, batteries have made the bulk of their revenue from selling Ancillary Services to ERCOT.
Ancillary Services are commitments that resources make to ERCOT to be online during a given hour and ready to provide power (or reduce load). Ancillary Services differ in terms of how soon a resource must respond once it is deployed by ERCOT and for how long it must be able to provide power. ERCOT procures these commitments in an auction process in the Day-Ahead market.
Modo includes all of the primary Ancillary Services in our Benchmark:
- Regulation Up / Regulation Down - these services are used to manage small second-to-second imbalances between power load and generation, in order to keep the system frequency at 60.0 Hz.
- Responsive Reserve (RRS) - this service is the next in line after Reg Up/Down to respond to deviations in frequency.
- ERCOT Contingency Reserve Service (ECRS) - this service is used to provide additional dispatchable capacity more so than to arrest frequency deviations. As such, its required response time is slower (10 minutes) and its maximum duration is longer (2 hours).
- Non-Spinning Reserve - this is the slowest responding (30 minutes) and longest duration service (4 hours), also used for additional dispatchable capacity.
Modo's ERCOT Index provides fleet-wide and asset-specific battery revenue earned in each of these markets.
To calculate Ancillary Services revenues, we combine the following data:
- Day-Ahead Generation Resource Data - the amount of each Ancillary Service awarded to each resource, and the clearing price for each.
Because Ancillary Services are payments for capacity and not utilization, meaning that revenues are locked in during the Day-Ahead market and not dependent on Real-Time energy imbalances, calculated Ancillary Services revenues are rather straightforward. We simply multiply each resource's awarded quantity by the clearing price for that capacity for each service, and this gives us each resource's earnings for each service.
Updated 25 days ago