Top Battery Location Methodology
Utility scale Battery facilities once interconnected to the Grid can take advantage of several “layers” of
potential revenue, including; Next Day or Real Time Energy, Frequency Regulation (Regulation Up and
Regulation Down), and Reserve (Spinning and Non-Spinning). Participation is scheduled on an hour by
hour basis in the Next Day Market but a Battery can also sell (or buy) energy into the Real Time (5
minute) market if capable. Therefore given the plethora of options and ability to modify behavior within
a given day, both the level of pricing as well as the volatility of outright as well as spread pricing
becomes an important factor in valuing the potential earnings of a Battery. As a starting point for
determining the relative value of a particular location (node) on the ERCOT system we reviewed all
nodal Next Day pricing across over 16,000 nodal locations. In particular, we examined the greatest
difference between the highest and lowest hourly price for each day over the period of 6/1/2020 to
6/30/2021, while excluding 2/2021 (for reasons which may be obvious). We then calculated the average
of each day’s hourly “spread” across a given month. We then averaged each of these monthly values
across the 6/1/2020-6/30/21 time period (x 2/2021). Averages were used to control for nodes which did
not have a full set of monthly data for the period. Lastly, we chose the top twenty nodal locations for
highest average daily spreads across the highest and lowest hours. For those twenty locations we then
ran the version of the “Battery Calculator” which is an analytics module on the Clarity Grid website. This
calculator assumes perfect foresight for the scheduling of a 1 hour battery each day (absolute highest
and lowest hour) times the capacity of the Battery. These results were then rank ordered 1-20.
One Hour ERCOT Battery Simulation Results
Our previous studies had identified West Texas and the Panhandle area near Midland as those with the
most attractive hourly spreads, a new location dominated our screen for this run. Of the top 20
locations for a one hour Battery, the Edinburg/McAllen/Pharr region of South Texas occupied 13
locations on the list, and 11 of the top 12. This was predominately due to extremely high prices in
August of 2020 (See Chart for Azteca). Interestingly these prices were far in excess of the zonal prices
seen at this time indicating high levels of congestion at these load points, and therefore extremely
attractive interconnection points. Spreads at this point averaged over $170/mw for the entire period of
the study. The lone exception to the dominance of points in South Texas was seen at Fort Stockton,
specifically the TN Century substation (Oxy Century Plant) where spreads averaged just under $170/mw
(see Chart 2). On the plus side high prices were seen more consistently at this Load point with high
prices in August but also often in September, November and December of 2020.
As to most attractive hours to dispatch at South Texas Load points, most occurred at 15:00-16:00 hours
with some observations at 17:00-20:00 and charging mostly 2:00-4:00. During winter months Peak
pricing was seen at 7:00-9:00 but was fairly rare. Ft Stockton peak pricing hours were more widely
disbursed with 15:00-21:00 defining the dispatch range, and charging at low pricing points had almost
no discernable pattern occurring at almost any hour of the day however most frequently from 2:00-4:00
although this pattern seems to have broken down recently.
Full Study Results
Attached is the full ranking and background data for the 20 locations studied as well as kml file locations
viewable on Google Earth Pro.
Utility scale Battery facilities once interconnected to the Grid can take advantage of several “layers” of
potential revenue, including; Next Day or Real Time Energy, Frequency Regulation (Regulation Up and
Regulation Down), and Reserve (Spinning and Non-Spinning). Participation is scheduled on an hour by
hour basis in the Next Day Market but a Battery can also sell (or buy) energy into the Real Time (5
minute) market if capable. Therefore given the plethora of options and ability to modify behavior within
a given day, both the level of pricing as well as the volatility of outright as well as spread pricing
becomes an important factor in valuing the potential earnings of a Battery. As a starting point for
determining the relative value of a particular location (node) on the ERCOT system we reviewed all
nodal Next Day pricing across over 16,000 nodal locations. In particular, we examined the greatest
difference between the highest and lowest hourly price for each day over the period of 6/1/2020 to
6/30/2021, while excluding 2/2021 (for reasons which may be obvious). We then calculated the average
of each day’s hourly “spread” across a given month. We then averaged each of these monthly values
across the 6/1/2020-6/30/21 time period (x 2/2021). Averages were used to control for nodes which did
not have a full set of monthly data for the period. Lastly, we chose the top twenty nodal locations for
highest average daily spreads across the highest and lowest hours. For those twenty locations we then
ran the version of the “Battery Calculator” which is an analytics module on the Clarity Grid website. This
calculator assumes perfect foresight for the scheduling of a 1 hour battery each day (absolute highest
and lowest hour) times the capacity of the Battery. These results were then rank ordered 1-20.
One Hour ERCOT Battery Simulation Results
Our previous studies had identified West Texas and the Panhandle area near Midland as those with the
most attractive hourly spreads, a new location dominated our screen for this run. Of the top 20
locations for a one hour Battery, the Edinburg/McAllen/Pharr region of South Texas occupied 13
locations on the list, and 11 of the top 12. This was predominately due to extremely high prices in
August of 2020 (See Chart for Azteca). Interestingly these prices were far in excess of the zonal prices
seen at this time indicating high levels of congestion at these load points, and therefore extremely
attractive interconnection points. Spreads at this point averaged over $170/mw for the entire period of
the study. The lone exception to the dominance of points in South Texas was seen at Fort Stockton,
specifically the TN Century substation (Oxy Century Plant) where spreads averaged just under $170/mw
(see Chart 2). On the plus side high prices were seen more consistently at this Load point with high
prices in August but also often in September, November and December of 2020.
As to most attractive hours to dispatch at South Texas Load points, most occurred at 15:00-16:00 hours
with some observations at 17:00-20:00 and charging mostly 2:00-4:00. During winter months Peak
pricing was seen at 7:00-9:00 but was fairly rare. Ft Stockton peak pricing hours were more widely
disbursed with 15:00-21:00 defining the dispatch range, and charging at low pricing points had almost
no discernable pattern occurring at almost any hour of the day however most frequently from 2:00-4:00
although this pattern seems to have broken down recently.
Full Study Results
Attached is the full ranking and background data for the 20 locations studied as well as kml file locations
viewable on Google Earth Pro.
Thank you for your interest in Clarity Grid Solutions’ Battery Study. Please contact us if you have any questions or would like to discuss our findings in more detail.
