On July 17, 2024, E3 hosted a public webinar on our storage revenue forecasting methodology and views on the California (CAISO) storage market. Emily Rogers, Nate Miller, and Kush Patel presented key recent trends in CAISO, including:
- The impact of increased solar and storage builds since 2018 on energy prices, ancillary services (AS) prices, and average daily 4-hour storage spreads.
- Historical battery storage revenues, which decreased on average from 2022 to 2023 with a wide range between different asset revenues and market participation models.
Emily provided an overview of the E3 RESTORE model, a price-taker dispatch optimization model, and its use cases with a focus on front-of-the-meter battery storage revenue forecasting. Using RESTORE, E3 models multiple operational cases for the Day Ahead Energy, Real Time Energy, and Ancillary Services market participation to produce final revenues based on an AS market clearance rate.
Watch the event recording below and find the slides here. Materials shared include a RESTORE backcast comparison to historical revenues for a CAISO asset, and forecasted 4-hour storage revenues for snapshot years.
Key webinar takeaways:
- CAISO energy system supply and demand are rapidly changing, which motivates the need for fundamentals-based price and revenue forecasting.
- Battery storage market value for capacity, energy, and ancillary services varies widely by asset due to different price dynamics, operational strategies, contractual strategies, and performance, which necessitates a flexible and reliable storage revenue forecasting methodology.
- Reasonable and trustworthy revenue forecasts aligned with market conditions and trends are important for underwriting investments in storage.
Learn more about E3’s in-house tools here.
