How Real-Time Market Operations Can Boost Your Energy Storage ROI

Optimization and management of energy assets are critical topics for any renewable energy or storage asset owner. Today, battery storage assets are an excellent opportunity for system operators and investors. Battery Energy Storage Systems (BESS) are becoming more critical for our clean energy economy and overall system reliability.  This asset class has provided investors with significant opportunities for revenue generation through monetization of energy market arbitrage and ancillary services. However, maximizing ROI with storage assets is critical to each project’s success. This article explores how storage assets support the electric system, how battery asset owners can monetize their investments by utilizing real-time energy markets, and SYSO’s approach to dynamic storage optimization.

Energy storage arbitrage involves charging the battery when prices are low and discharging it when prices are high, allowing asset owners to capitalize on the price difference. This arbitrage opportunity can provide a significant revenue stream for energy storage systems in real-time markets, where prices fluctuate frequently.  Selecting the right strategy to maximize margin potential for a BESS asset can be complex and challenging given the potential volatility of revenue streams that are available and the relatively limited discharge duration of the asset. 

What You Need To Know

Success in storage arbitrage depends on having access to high-fidelity forecasts of upcoming energy and ancillary price interval data. In order to fully monetize their assets, battery storage operators must track key metrics such as the state of charge (SOC), forecasted market prices, and potential revenue from ancillary services. Tools such as SYSO’s 24/7 asset market operations services can help optimize battery performance, leveraging high fidelity forecasts of price data, enabling SYSO’s market operations team to make informed decisions, charging and discharging batteries to capture revenue stream periods of maximum benefit. 

Challenges & Risks

Participating in energy and ancillary markets is challenging. Price volatility, regulatory hurdles, and the unpredictable nature of energy supply and demand can make executing optimal arbitrage decisions complex. Furthermore, owners must ensure their batteries maintain an optimal strategy for peak performance in volatile real-time conditions and manage overall asset longevity. Improper timing of battery dispatch or poor market forecasting can result in lower-than-expected revenue or even financial losses. Utilizing best-in-class forecasting and optimization software and automated decision support technology to optimize your storage assets is important to its success.  Going beyond just software, having an experienced team of asset operators with deep expertise in BESS asset market operations is paramount to asset success from day one through the asset’s full lifecycle.  

Despite the challenges, the benefits of energy storage arbitrage in real-time markets can be substantial. Real-time operations allow battery storage systems to generate revenue through multiple streams, known as revenue stacking. Revenue stacking involves maximizing returns by participating in multiple market activities. In order to maximize the revenue of a battery asset, the operator must be able to deploy the battery to take advantage of multiple revenue streams, such as real-time power, day-ahead power, spinning reserves, and non-spinning reserves. The chart below shows how this revenue mix between ancillary services and energy has dynamically evolved in 2022, 2023, and 2024:

In this graph, energy and ancillary services as a percent of total revenue for the top 20 BESS assets in the market show a dynamic trend, with energy moving from just 3.7% of total revenue in 2022 to 24.5% for the first half of 2024.  As this shift occurred, SYSO’s optimization showed top-in-class performance in each period.  The graph below shows SYSO revenue over time as contrasted to two other similarly located assets in the same market:

As shown above, it is critical to have a reliable and dynamic partner that can monitor and optimize your battery asset to maximize revenue and margin potential as markets continue to evolve on a daily and sub-hourly basis. With multiple revenue streams available in certain markets—such as energy, ancillary services, and capacity markets—successfully navigating these opportunities requires detailed planning and reliable forecasts of day ahead and real-time data. For example, as evidenced in the charts above, real-time power revenue has become increasingly prevalent in the market since 2022. By having access to this critical data and the ability to respond to market shifts, battery asset owners can strategically dispatch their energy to take full advantage of each revenue source and ensure peak returns.

SYSO’s approach to these markets involves enhancing our client’s operating strategy by incorporating forecasting through the day ahead and real time envelope and responding to dynamic changes in market prices. SYSO provides advanced energy market arbitrage services to help asset owners capitalize on energy and ancillary service price fluctuations over the day ahead and real time horizon. With access to critical forecasts, real-time data, and insights from SYSO’s 24-hour Network Operations Center (NOC), asset owners can effectively optimize their energy storage systems to attain optimal battery dispatch. 

Market Access

In addition to asset optimization, SYSO provides market access for battery owners. Each wholesale market in the US is unique and has revenue streams and processes that can sometimes be complex for non-specialized participants.  SYSO has expertise in each US wholesale energy market and assists storage owners with energy market revenue stream registration and compliance.  These wholesale market processes are unique to each ISO and RTO market.  SYSO has developed expertise in working with clients to ensure seamless integration into all available revenue streams, whether for capacity, energy, or ancillary services. SYSO’s expertise ensures that battery storage systems are registered and optimized to participate in markets like PJM, MISO, SPP, ISO-NE, NYISO, ERCOT, and CAISO. Whether you want to become a direct market participant or gain access to the market through SYSO, we can help you participate in these wholesale energy markets.  SYSO is registered as a qualified scheduling entity in ERCOT, a schedule coordinator in CAISO, a lead market participant in ISO New England, and a Market Participant in MISO, PJM, and NYISO.  

Through integrating our offerings in dynamic revenue stack optimization, market access and scheduling, and 24/7 NOC operations services, SYSO brings a vertically integrated comprehensive solution to the market that results in improved overall margin performance and a simplified market operations strategy for your asset.

Ready To Boost Your Energy Storage ROI?

SYSO is dedicated to helping battery asset owners navigate the complexities of the energy markets and maximize their returns. Whether you’re interested in optimizing battery energy storage systems or exploring new energy storage revenue streams, SYSO’s expertise in energy storage asset operation and optimization will help you get the most out of your assets. Contact us today to learn how we can help you achieve success.