Stem’s recent webinar, “Unlock ERCOT’s Energy Storage Economics: The Case for a Standalone 2-hour Battery,” held on August 31, 2023, brought together Stem’s experts to explore new possibilities of energy storage systems in the ERCOT (Electric Reliability Council of Texas) market. This webinar was based on a newly published white paper, authored by webinar speaker Amit Gohil, Senior Director, Wholesale Markets (Front-of-the-Meter) at Stem. Vlad Miklyukh, Senior Product Manager at Stem joins Amit in the webinar. This blog post will recap the key takeaways.
Watch the webinar on-demand here
The Changing Landscape of Energy Storage in ERCOT
ERCOT, known for its commitment to renewable energy integration and grid reliability, is witnessing a significant transformation in the role of energy storage systems. The webinar delved into these systems’ crucial role in seamlessly integrating renewable energy sources, ensuring grid reliability, and cost-effectively addressing peak demand.
A Shift in Perspective: From 1-hour to 2-hour BESS
One of the most intriguing aspects discussed in the webinar was the paradigm shift in energy storage duration. Traditionally, ERCOT favored shorter-duration Battery Energy Storage Systems (BESS). However, Stem’s comprehensive revenue simulations have challenged this norm. The webinar presented compelling evidence that a 2-hour BESS can significantly boost cash flows relative to a 1-hour system. In fact, the internal rate of returns (IRR) in each major zone of ERCOT can see improvements of at least 15% with this shift.
Stem’s Revenue Simulation Insights
The webinar unveiled data from Stem’s revenue simulations that present a compelling case for adopting 2-hour Battery Energy Storage Systems (BESS) over the traditional 1-hour systems. This revelation gave attendees valuable insights into optimization analytics and the advanced revenue simulation techniques Stem employs.
Exploring ERCOT’s Contingency Reserve Service (ECRS)
A pivotal component of the webinar included a discussion on ERCOT’s Contingency Reserve Service (ECRS). Attendees were guided through ECRS and its potential impact on the economics of energy storage systems.
The webinar also gave attendees a preliminary analysis of ECRS prices and associated trends. This analysis provided valuable information to understand better how ECRS could influence energy portfolios and financial strategies.
Policy Changes: Embracing Longer Duration BESS
The webinar concluded by spotlighting significant policy changes currently in motion. These policy shifts are specifically geared toward supporting longer-duration BESS. Stem’s presentation shows how these impending changes are poised to impact the economics of energy storage in the ERCOT market.
The insights shared by Stem’s experts, Amit Gohil and Vlad Miklyukh, provide a valuable roadmap for developers and asset owners looking to navigate the changing tides of ERCOT’s energy market.
For those who missed the webinar, the on-demand webinar recording is available here.
You can download the white paper here.
