How does FTM energy storage make money?
FTM storage generates revenue through multiple stacked value streams including capacity payments, energy arbitrage, and ancillary services.
FTM storage projects typically rely on several revenue streams, often "stacked" together to make the economics work.
Energy arbitrage: The battery charges when electricity prices are low (typically when solar or wind production is high) and discharges when prices are high (during peak demand). The spread between buy and sell prices is the profit margin.
Capacity payments: Grid operators pay storage facilities to be available during peak demand periods. Even if the battery isn't dispatched, the owner receives payment for standing ready.
Ancillary services: These include frequency regulation (rapidly adjusting output to keep the grid at 60 Hz), spinning reserves (available capacity that can respond within minutes), and voltage support. Ancillary services often command premium prices because batteries can respond faster than traditional generators.
Resource adequacy contracts: Utilities contract with storage projects to ensure they have enough capacity to meet future demand, providing predictable long-term revenue.
The most successful FTM projects stack multiple revenue streams to maximize returns. The specific mix depends on the market structure, regional grid operator rules (ISO/RTO), and local pricing dynamics.