Energy price spreads in ERCOT are becoming increasingly important to a battery’s bottom line, as ancillary markets have continued to saturate (see All Signs Point to Arbitrage).

Figure 1 | RT TB2 price spreads by hub (excludes Uri)

While ancillary prices are consistent across all of ERCOT, energy arbitrage revenues are specific to individual nodes. Arbitrage opportunities across ERCOT, as measured by the TB2, showed little geographic differentiation until 2022, when Houston hub in particular started to see premium selling opportunities. Since then, Houston has fallen to the bottom of the stack, while West has risen up as the hub with the largest price spreads for the last 2 years.....