CALGARY, Alberta (Dec. 18, 2024) — Enverus Intelligence® Research (EIR), a subsidiary of Enverus, the most trusted energy-dedicated SaaS company that leverages generative AI across its solutions, has released a report that encompasses ancillary market design changes in several Independent System Operator (ISO) states and regions, including Electric Reliability Council of Texas (ERCOT), Pennsylvania, New Jersey and Maryland (PJM), and New England (ISONE), and how these changes will impact specific generators.
“The market design changes for each ISO — ERCOT, PJM and ISONE — all have an effect on generators providing ancillary services,” said Marc De Guzman, associate at EIR. “Peaker plant owners in ERCOT with the highest market share will most likely experience revenue reductions primarily due to the removal of the Operating Reserve Demand Curve (ORDC). In PJM however, changing factors such as revised lost opportunity cost (LOC) calculations will prompt marginal units to change their bidding behavior.”
“The assets most affected by these changes across ISOs will likely be batteries and natural gas peaker generators,” De Guzman added. “However, we do not anticipate a major impact on their revenue streams as they are expected to adjust their bidding strategies to sustain current income levels.”
Key takeaways from the report:
- EIR expects natural gas peaking units and batteries in ERCOT to see a decrease in revenue from the removal of the scarcity pricing adder ORDC.
- PJM’s regulation market redesign will create more arbitrage opportunities for batteries, allowing them to optimize dispatch strategies and capitalize on price volatility. EIR anticipates higher overall regulation market prices in response to the revised LOC calculations as marginal units change their bidding behavior.
- ISONE’s day-ahead ancillary services initiative (DASI) is projected to increase revenue for batteries and natural gas peaker plants by enabling them to ramp up during high-demand periods.
EIR’s analysis pulls from a variety of Enverus products including Enverus Intelligence® Research and Enverus Foundations®| Power & Renewables.
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About Enverus Intelligence® Research
Enverus Intelligence® | Research, Inc. (EIR) is a subsidiary of Enverus that publishes energy-sector research focused on the oil, natural gas, power and renewable industries. EIR publishes reports including asset and company valuations, resource assessments, technical evaluations and macro-economic forecasts; and helps make intelligent connections for energy industry participants, service companies and capital providers worldwide. EIR is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Enverus is the most trusted, energy-dedicated SaaS company, with a platform built to create value from generative AI, offering real-time access to analytics, insights and benchmark cost and revenue data sourced from our partnerships to 95% of U.S. energy producers and more than 40,000 suppliers. Learn more at Enverus.com.
