In Southern California, the locational marginal pricing (LMP) during peak times can reach up to $150/MWh in real-time tariffs, which is significantly higher than the $35-70/MWh in Northern California. In 2022, more than 60% of new energy storage added to the grid was allocated for price arbitrage, with California accounting for an impressive 80% of that share. Key industry players like Nextera and Arevon Energy emphasize the importance of strategic siting and digital asset management to optimize earnings from battery assets. Moreover, revenue stacking, demonstrated by Hecate Energy's 300 MW Humidor BESS project in Santa Ana, allows for both arbitrage and grid stabilization services, resulting in increased return on investment and grid resiliency.
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The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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