As electric power markets undergo a significant transition toward intermittent generation amid a growing demand environment, electric utilities, developers, and investors must understand the different value streams available to flexible resource additions.
In this report, CRA’s energy experts evaluate the performance of six flexible resources (three gas-fired and three battery storage) using historical energy and ancillary services data from the Electric Reliability Council of Texas (ERCOT) market in its proprietary Energy Storage and Ancillary Service Optimization (ESOP) tool. CRA’s analysis demonstrated that the ERCOT market provides different value opportunities for different resource types.
CRA’s analysis identified the following major conclusions:
- Battery storage technologies were projected to generate higher levels of revenue overall, particularly due to their ability to participate in the ancillary service market when not actively charging or discharging.
- The large majority (around 90%) of revenue for the natural gas-fired resources was projected to come from the energy market, and given lower ongoing fixed costs, natural gas resources were projected to generate greater value overall.
- During sustained high-price periods, such as Winter Storm Uri, natural gas resources outperform batteries, as batteries face high charging costs and fewer energy arbitrage opportunities, relying more on ancillary services revenue.
- Both resource types generate most of their revenue from the energy market during volatile price periods, with longer-duration battery storage excelling in these conditions.
- Modular resource options enable optimized participation across multiple markets and reduce outage risks.
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