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OUR LATEST ARTICLES Merlin's Library Filter by Category > Subscribe Regulatory Compliance May 6, 2026 Field Failures > Read Series of graphical lessons learned from field Quality Assurance (QA) of solar and Battery Energy Storage System (BESS) projects Energy Markets May 4, 2026 Midcontinent Independent System Operator [MISO] > Read Energy Markets Apr 27, 2026 Round-Trip Efficiency Is Not a Spec Sheet Number - It's a System Behavior Under Load > Read Why BESS efficiency claims without operating context are meaningless, and what actually drives the 15–20 point gap between lab specs and field performance Regulatory Compliance Apr 20, 2026 The Container Problem in LFP Long-Duration Storage > Read Why bigger cells don't mean proportionally more energy in a 20-foot box Energy Markets Mar 27, 2026 From lab to grid: making LDES bankable > Read The chemistry debates hide the real issues: Commercial readiness, technological advancement, operational flexibility, and market adaptation Feb 10, 2026 Foreign Entity of Concern (FEOC) Regulations for Battery Energy Storage Systems (BESS) > Read Based on Notice 2026-15 Energy Markets Feb 4, 2026 Tired of BESS commissioning delays? Start the process earlier than you think > Read Feb 2, 2026 PJMInterconnectivity > Read Summary of Base Residual Auction (BRA) 2027/2028 Energy Markets Dec 4, 2025 CAISO Market Operations > Read Understanding IFM, FMM and RTD in California's Energy Market Energy Markets Dec 2, 2025 SMART 3.0 - PY 26 Update > Read What's New in MA's Solar and Storage Framework Energy Markets Nov 11, 2025 ERCOT RTC + B > Read A Market Overhaul in Progress Energy Markets Nov 6, 2025 The Future of Grid - Scale Storage > Read How Technology, Market Shifts, and Design Are Redefining Energy Storage Regulatory Compliance Oct 30, 2025 NFPA 855 (2026) > Read Camelot Takes on Evolving ESS Safety Standards Energy Markets Oct 28, 2025 Smart 3.0 Is Here > Read Here's What You Need to Know Construction Aug 26, 2025 Constructability Part 2 > Read From Concept to Construction – Getting Solar Project Layout and Access Right Regulatory Compliance Aug 8, 2025 Camelot Unpacks UL 9540 – Part 2 > Read Regulatory Compliance Aug 8, 2025 Camelot Unpacks UL 9540 – Part 1 > Read Regulatory Compliance Apr 4, 2025 New U.S. Tariff Policy > Read Implications for Energy and Manufacturing Energy Markets Mar 20, 2025 New Acquisition Opportunity in MISO > Read M&A Opportunity Mar 14, 2025 New Acquisition Opportunity in ISO-NE > Read Construction Mar 10, 2025 Constructability Part 1 > Read The Critical Role of Constructability in Renewable Energy Projects Regulatory Compliance Feb 13, 2025 NERC’s New Compliance Threshold > Read What You Need to Know About the 20MW+ Requirements Energy Markets Feb 12, 2025 MA SMART Part 2 > Read Key Financial Implications for Hybrid Systems Energy Markets Jan 15, 2025 MA SMART Part 1 > Read Massachusetts SMART and Clean Peak Overview M&A Opportunity Jan 14, 2025 New Acquisition Opportunity in ERCOT > Read Energy Markets Nov 7, 2024 Part 2: VDER Revenue Stack > Read VDER Revenue Stack for Hybrid (Solar + Storage) Projects Energy Markets Oct 31, 2024 U.S. ISO/RTO Regions > Read Exploring Market Opportunities Across U.S. ISO/RTO Regions Energy Markets Oct 10, 2024 Part 1: VDER Revenue Stack > Read VDER Revenue Stack for Standalone Storage Projects Solar Availability Sep 11, 2024 Solar Availability Series Part 4 > Read Camelot’s Balanced Approach Solar Availability Aug 30, 2024 Solar Availability Series Part 3 > Read Methods for Maximization Solar Availability Aug 23, 2024 Solar Availability Series Part 2 > Read Measurements and Metrics Solar Availability Aug 15, 2024 Solar Availability Series Part 1 > Read Background and State-of-the-Industry Energy Markets Jan 30, 2024 On VDER > Read Simplifying the (Somewhat) Simplified Economics of DG Projects in New York State Subscribe Stay informed Email* Subscribe I want to receive alerts for new articles

WHO WE ARE At Camelot, we believe in and work towards a just, equitable, and sustainable society where everyone has access to clean and affordable electricity. Getting to this point will require substantial investment in solar, energy storage, and other clean energy technologies, with such investment coming not only from banks and investment funds but communities, corporations, and governments. > Read More RT Our Round Table Shawn Shaw, PE Founder, CEO Read More Bill Coon Head of Construction Read More Bill Atkinson, CEM Senior Project Engineer Read More Jacques Cantin, PE Senior Project Manager, PE Read More Lynn Appollis-Laurent, PE Director, Technical Services Read More Raafe Khan Head of Energy Storage and Emerging Markets Read More Mark Warner Senior Project Manager Read More Andrew Leslie Senior Project Engineer Read More Taylor Parsons Director, Technical Advisory Read More Aaron King, PE Director of Programs & Policy Read More Michelle Aguirre Project Manager Read More Nimisha Shah Associate Analyst Read More

May 4, 2026 Midcontinent Independent System Operator [MISO] Executive Summary All zones met resource adequacy requirements across all four seasons Summer price fell 36% YoY from $666.50(2025/26) to $424.30 as new capacity additions (+5.6 GW) outpaced retirements Summer surplus recovered from 2.6 GW to4.6 GW, even as PRMR increased by 2.7 GW RBDC in year 2 performed as designed as evidenced by the fact that all seasons cleared above reliability targets. Total Offered Capacity Surplus above Initial PRMR grew 2.0 GW YoY despite PRMR rising 2.7 GW, confirming that new additions outpaced both retirements and higher requirements OMS-MISO survey had projected 1.4–6.1 GW range; actual 4.6 GW (total) / 4.7 GW(waterfall chart) fell within range All Seasons Above Target The sloped demand curve priced incremental reliability value above the minimum instead of collapsing to zero — a fundamental improvement over the prior vertical demand curve design N/C effective summer margin: 12.0%; South:9.7%. Zonal Pricing Dynamics N/C (Z1–Z7): $424.30. South Z8 & Z10:$384.10. South Z9: $412.10 (binding LCR needed more local capacity) Fall, Winter, Spring cleared at uniform system-wide prices No transmission congestion binding outside summer was observed LRZ 9 cleared at $412.10, a $28/MW-day premium over the rest of the South because it faced a binding Local Clearing Requirement, not just a PRMR shortfall This signals insufficient locally deliverable capacity and is a developer siting signal Wind and Solar are Growing But Concerns Mount in the Winter Solar is now 8.6% of summer cleared SAC Accreditation: 50% for Summer/Fall/Spring,5% for Winter. The 5% winter cap is the binding seasonal constraint - solar contributes only 0.8 GW in winter vs 12.2 GW in the summer Wind summer ELCC fell from 20.8% to 18.2%per the LOLE study - a methodology-driven decline, not a fleet reduction. Wind remains critical in winter (7.0% of winter SAC vs. 3.9% summer), filling the gap left by Solar's 5% winter accreditation. Load Growth Summer CPF rose from 122.6 GW (2025) to125.1 GW (2026) - the largest single-year jump in the dataset. PRM held flat at 7.9%; the full 2.5 GW CPF rise translated directly into a 4.8 GW increase in Final PRMR. Member submissions escalated across each survey cycle. High scenario: +7 GW by 2030(2.1% CAGR). Low: +5.5 GW (0.9% CAGR).2025 summer peak was 121 GW. Drivers: data centers, re-shore manufacturing, electrification. Without accelerating additions, 2027/28 risks scarcity-level pricing . Resource Mix Winter PRMR is 6.6 GW (4.8%) below summer. Solar's 5% winter accreditation drops its contribution from 12.2 GW(summer) to 0.8 GW (winter). Gas rises from 38.9% to 41.8% of cleared SAC Coal/Nuclear/Hydro/Oil combined has fallen30% since Summer 2016. Batteries cleared 893.8 MW in summer,870.4 MW in winter. Year-over-year trend:~50 MW (2024/25) → ~500 MW (2025/26) →893.8 MW (2026/27). Summer capacity revenue: $424.30/MW-day × 92 days × 0.95 ≈$37,084/MW-year ($37.08/kW-year). Updated GVTC hourly-discharge methodology in effect for 2026/27. Price Relief, But Still Elevated Annualized prices fell from ~$217/MW-day(2025/26) to $126.19/MW-day (2026/27 N/C) a~42% decline: 2022/23: ~$17/MW-day 2023/24: ~$6/MW-day 2024/25: ~$8/MW-day 2025/26: ~$217/MW-day ← spike 2026/27: $126.19/MW-day ← relief Still ~15x above the 2023-2025 average LSEs and retail customers will see meaningful relief but no return to pre-2025norms CONE Still Far Above Clearing Summer cleared at $424.30 vs. N/C seasonal CONE of $1,453.99/MW-day (29.2%). South CONE: $1,348.59. Annual CONE by zone:$123,250–$142,970/MW-yr New dispatchable thermal cannot be financed on capacity revenue alone Bilateral contracts and ERAS fast-track approvals remain essential ~92% of load was self-supplied or bilaterally contracted before the auction. Only 11,305.4MW of non-self-scheduled capacity cleared in summer out of 142,374.3 MW total committed Direct PRA price exposure is limited but not zero — particularly for retail-choice customers in IL, MI, OH, and other competitive states. Advantage BESSt Solar cleared 12.2 GW in summer but only 0.8 GW in winter (5% accreditation vs. 50%). Summer/winter accreditation gap creates a 15:1 capacity value imbalance. Hybrid solar + BESS structures are commercially advantaged. Future DLOL-based accreditation (in development) may shift these values At $424.30/MW-day × 92 summer days × 0.95 (four-hour credit) = $37,084/MW-year ($37.08/kW-year) in summer capacity revenue alone. Combined with energy arbitrage and ancillary services, this increasingly anchors BESS project economics DR cleared 9,099.5 MW in summer (up from 9,004.4MW) and 7,789.6 MW in winter. Cleared Load Modifying Resources (including BTMG) total 9.1 GW in summer, 7.7 GW in winter MISO's tightened DR compliance means that performance tests will be required, not mock drills. This raises the bar but rewards credible programs 2026 PRA RDBC Offer Curves Things to Watch Thank you for Reading! Kindly contact us hello@camelotenergygroup.com for any questions! Raafe Khan < Back Back

Camelot Energy Group is a technical & strategic advisor to owners and investors in clean energy & energy storage projects, programs & infrastructure. We specialise in Solar, Energy Storage, Consulting, Engineering, Batteries, Due Diligence, Energy Access, Strategy, Owner’s Engineering & Advisory. Bespoke technical and strategic advisory for a better world About Us Our mission is to power a just, equitable, and sustainable society with clean energy . Our team of industry experts supports asset owners, investors, public agencies, and others through owner’s engineering, technical due diligence, and strategic advisory services. LEARN MORE WHO WE ARE OUR SERVICES LATEST ARTICLES CAMELOT PHOTO GALLERY

Aug 30, 2024 Solar Availability Series Part 3 Welcome back for Part 3 of Camelot’s series on solar availability, which is an appropriately-hot topic as the industry continues to mature. If you’re just joining us for the series, please checkout Part 1 and Part 2 of this series. We’ve set the groundwork with how availabilities are calculated and reported along with the current state of IE assumptions. Today we’ll touch on ways of maximizing availability (minimizing downtime). This topic could be its own series, so we’ll focus on the bigger picture. If you’re curious about Camelot’s stance on availability assumptions as an IE, be on the lookout for future parts in this series. Thank you for joining us! The most impactful sources of downtime come from major component failures such as from inverters, which put entire blocks of a system offline at the same time, although more minor events can still bring smaller portions of the site down. We’ll focus primarily on the most impactful contributors to downtime here. There are two broad, controllable factors which impact availability: The frequency of downtime events , driven by component failure rates and the need for planned maintenance. The quality of the engineering and proactive maintenance is important for this piece; and The duration of downtime events , driven by staffing, readiness of replacements, and other primarily-O&M considerations. Reducing the Frequency and Duration of Downtime Events During Operations Owners and O&M providers and can have a significant impact on both the frequency and duration of downtime events at an operational project once it’s been built. Here are a few recommendations for ensuring success: Follow a Robust O&M Agreement. The O&M agreement should be closely followed during operations, which unfortunately does not always occur. The agreement should be robust and include elements of the items below. More recommendations for O&M agreements are also included in the next section. Predictive Maintenance: Utilize data analytics to predict potential equipment failures before they occur. By analyzing trends and historical data, O&M teams can identify patterns that signal imminent issues, allowing for timely interventions. Sufficient Preventive Maintenance: Schedule regular maintenance based on equipment manufacturers' guidelines and site-specific conditions. This includes checking electrical connections and inspecting mechanical systems such as trackers. Of note, energy-based availabilities can be optimized by scheduling maintenance events during periods of expectedly-low production. The time-based availability metric might be the same, but the smaller energy loss means a higher energy-based availability. Spare Parts Management: Maintain a well-stocked inventory of critical spare parts on-site or at a nearby location. This ensures that replacements can be done swiftly without waiting for parts to be ordered and delivered. Follow manufacturer recommended list and review periodically as components may become less available over time. Strong Vendor Relationships: Collaborate closely with equipment manufacturers and vendors to gain access to the latest updates, best practices, and support services. This can also help in negotiating favorable terms for spare parts and service agreements. Third-Party Audits: Engage third-parties to review the performance of the O&M program periodically. External audits can provide fresh insights and identify areas for improvement that internal teams might overlook. Training: conduct regular staff training and testing to ensure readiness for major component failures and extreme weather events. An inverter fire which caused system-wide availabilities to drop for a significant period of time Reducing the Frequency and Duration of Downtime Events During Development O&M activities may be the most visible contributor to a Project’s operational success, but they are not everything. An ace car mechanic can still see more issues with an old, poorly-built junker than a novice will see with a durable, high-end car. Camelot encourages developers to have a mindset of ensuring long-term operational success, which leads to fewer issues and less-impactful downtime. For this, we offer a few broad suggestions: Environmental Impacts: Consider site suitability at an early stage. Evaluate potential environmental risks such as wildlife interference, extreme wind speeds, natural disasters, and erosion which could affect the project’s operation and maintenance. Durable Components : Select robust inverters, transformers, racking systems, and other components designed to withstand harsh environmental conditions and have low failure rates. This often means evaluating cost tradeoffs for more expensive components. Exceed Codes and Standards: At a minimum, ensure the project complies with all local, regional, and international standards for safety, performance, and environmental impact. Even more importantly, most EPC agreements only require code compliance, and code is not about longevity of the asset, it is about safety. As such, make sure your EPC Agreement reflects materials, methods, and design standards consistent with the planned (and financed) useful life. Access: Ensure the site has adequate access for maintenance personnel, which can impact the duration of downtime events. Make major equipment accessible near site roadways and ensure roads are wide enough to facilitate easy use of cranes and other heavy kit. Design the site to allow for spacing between components so that specialized equipment isn’t required for access and repair. Remote Monitoring Infrastructure : Deploy advanced SCADA (Supervisory Control and Data Acquisition) systems to monitor the performance of the solar farm in real-time. This allows for quick identification of issues before they lead to significant downtime. Contract with Reliable O&M providers : Developers will elect to engage with O&M providers during the later stages of development, and should do their due diligence on prospective providers to ensure they will have the right capabilities. The O&M contract should be comprehensive and include elements of the list in the prior section. A few of the most impactful items include: Availability Guarantees: The agreement should include specific availability targets. These targets set clear expectations for how often the solar plant should be operational, and should be tied to incentives to increase the chance of compliance and incentivize high availability. Maintenance Schedules and Protocols , including preventative maintenance schedules, corrective maintenance procedures, and component replacement protocols. Regular Reporting Requirements: The agreement should mandate regular performance reports, including availability, downtime events, maintenance activities, and any corrective actions taken. Transparency in reporting helps project owners monitor O&M effectiveness. For more details on ways of ensuring optimal operations at a solar project, Camelot has released a couple of related articles, including Navigating the Testing and Commissioning Process for Solar Projects , and Tips and Tricks for Procuring PV Modules in 2024 and Beyond . For quick examples of some of the more notable mistakes made in construction/operations which directly lead to lower availabilities, you can follow us on our ongoing Field Failure Series (FFS) . The next article in this series will cover Camelot’s balanced approach when advising our clients on availability expectations for our projects. In the meantime, for questions and more details about Camelot Energy Group and our distinct attitude towards these issues, please reach out at info@camelotenergygroup.com . About Camelot Energy Group is a technical and strategic advisor to owners and investors in clean energy and energy storage projects, programs, and infrastructure. Guided by our core values of courage, empathy, integrity, and service we seek to support the energy needs of a just, sustainable, and equitable future. Our team has experience in supporting 7+GW of solar PV and 10+ GWh of energy storage and offers expertise in technology, codes and standards, engineering, public programs, project finance, installation methods, quality assurance, safety, contract negotiation, and related topics. Our services are tailored to a providing a different kind of consulting experience that emphasizes the humanity of our clients and team members, resulting in a high quality bespoke service, delivered with focus, attention, and purpose. Key services include: -Technical due diligence of projects and technologies -Owner’s representative and engineer support -Strategic planning -Training and coaching -Codes and standards consulting -Contract negotiation and support < Back Back

Careers at Camelot We currently do not have any open positions available. Please check back later for future opportunities. You may send your resume to hello@camelotenergygroup.com to be considered for future openings.

< Back Shawn Shaw, PE Founder, CEO Shawn Shaw is the founder and CEO of Camelot Energy Group and has over 21 years of experience in the renewable energy and energy storage industry. During that time, Shawn has supported public programs in more than 10 states and acted as technical advisor to many of the largest banks and financiers in the world, providing technical due diligence, owner’s engineering, and independent engineering on well over 8 GW of solar PV and 5 GWh of energy storage projects in the US, Latin America, and Europe, ranging from design and construction of offgrid island power systems to acting as Independent Engineer for financing multiple 400MWh energy storage projects in complex US markets. Shawn has experience working with a wide variety of equipment suppliers, project developers, banks, financiers, government entities, and incentive program administrators. Shawn is a registered electrical engineer (Power Systems) in New York State and holds a B.S. in Applied Physics from Rensselaer Polytechnic Institute. Recently authored Energy Storage Systems: Based on the IBC, IFC, IRC, and NEC in collaboration with the International Code Council. shawn.shaw@camelotenergygroup.com

Camelot Energy Group is a technical & strategic advisor to owners and investors in clean energy & energy storage projects, programs & infrastructure. We specialise in Solar, Energy Storage, Consulting, Engineering, Batteries, Due Diligence, Energy Access, Strategy, Owner’s Engineering & Advisory. GET IN TOUCH Contact Us Boston, Massachusetts hello@camelotenergygroup.com First Name Last Name Email Phone Leave us a message... Submit Thanks for submitting!

Oct 31, 2024 U.S. ISO/RTO Regions The energy storage market, driven in large part by the Inflation Reduction Act, is hot and active, with many developers and investors making new investments and growing their storage portfolios. Unfortunately, overall market growth does not mean low risk for developers and the cost of picking the wrong market, revenue stack, contracting structure, or technology could spell disappointment for investors as they watch others pass them by. Sound and informed guidance on energy storage development is absolutely critical to capitalizing on this important growth area. At Camelot, we provide comprehensive market analyses across all U.S. Independent System Operator (ISO) and Regional Transmission Organization (RTO) regions. Our team analyzes each market’s unique characteristics, helping solar and energy storage developers identify the best opportunities for deploying Battery Energy Storage Systems (BESS) and hybrid projects. Here are some key points for each region: ERCOT (Electric Reliability Council of Texas) ERCOT doesn't have a firm real-time ancillary service market, relying sporadically on Supplemental Ancillary Service Market (SASM) auctions to make up for gaps in day-ahead obligations. However, by 2026, ERCOT aims to roll out a real-time co-optimization system for energy and ancillary services. Moreover, as storage saturates the market and as real-time co-optimization between energy and ancillary services gets implemented, ancillary services prices are expected to decline in the near term. Despite the potential saturation of ancillary services in ERCOT, the ongoing deployment of non-dispatchable renewable energy there, and the potential for new load growth, is helping the Lone Star State retain center stage for energy storage developers. However, many developers that come to Camelot for guidance make the mistake of thinking any Texas ESS project is likely to be successful. In reality, identifying the optimal placement and technology mix means all the difference between a profitable ESS project and one that struggles to pencil. Overall, the Houston Hub faces a lower risk of ERCOT related issues, including curtailment, compared to the South hub, which is likely to experience increasing challenges. CAISO (California Independent System Operator) Energy price volatility in CAISO increased significantly in 2022 and is projected to remain elevated in upcoming years, driven by higher gas prices and concerns over system reliability, creates a strong opportunity for BESS. Gas Pricing: Despite less expensive generation from solar and wind, elevated gas prices, impacted by supply constraints and global market dynamics, contribute to higher electricity prices. The availability of cheap electricity from renewables, combined with relatively expensive electricity from gas turbines during periods of low solar and wind resource, create a strong economic opportunity for energy storage. In addition to daily arbitrage, the combination of renewables generating under long-term fixed price contracts and flexible energy storage assets creates a valuable price hedge against fluctuating natural gas prices. System Reliability: CAISO’s grid faces reliability challenges due to increasing reliance on non-dispatchable renewable energy sources like solar, coupled with aging infrastructure, severe weather, and peak demand spikes, especially during summer heatwaves. BESS can mitigate these issues by providing grid stability, fast-acting reserves, and ancillary services to maintain balance. This growing demand for reliability services, along with capacity payments, offers BESS projects multiple revenue streams and a strategic edge in this volatile market. Moreover, California’s aggressive renewable energy targets make it a prime market for BESS projects. Our market overview highlights CAISO’s resource adequacy and ancillary services market changes, helping you understand how to optimize project returns. SPP (Southwest Power Pool) SPP offers significant wind energy potential and continues to expand its transmission network. The surge in renewable energy within SPP is causing a downturn in electricity prices, especially during periods of strong winds, which places intense financial stress on thermal power sources and underscores the importance of adaptable capacity and presents an opportunity for Long Duration Energy Storage (LDES). Our insights into SPP’s market dynamics focus on strategies to capture ancillary service revenues and enhance renewable energy integration through storage solutions. In addition, our team has demonstrated experience in deploying LDES solutions for BTM and FTM projects, putting us in a position to provide strategic insights in this space. PJM (Pennsylvania-New Jersey-Maryland) Interconnection PJM is undergoing rapid data center expansion, especially in Northern Virginia which has put pressure on the grid, causing congestion and high nodal power prices in the Dominion territory. As one of the largest RTOs, PJM presents a strong market with various revenue streams, including capacity and ancillary services. We provide clients with analysis of PJM’s capacity market changes, ensuring projects align with this highly competitive landscape. MISO (Midcontinent Independent System Operator) MISO is currently experiencing a significant transformation in its energy landscape. This shift is characterized by an accelerated adoption of renewable energy sources, alongside a concurrent phase-out of thermal generation plants. Key drivers behind this transition include elevated prices for natural gas and electricity, legislative actions at federal and state levels, demand from energy off-takers, and increasing pressure from stakeholders. MISO's vast geography and increasing renewable penetration create opportunities for BESS projects. Our team helps you understand the benefits of locating projects near congested nodes to optimize project returns. NYISO (New York Independent System Operator) New York is pioneering ambitious climate policies that prioritize storage development. With the recent update to the Energy Storage Roadmap by the New York PSC, storage deployments are expected to increase by 2030 to achieve 6 GW of energy storage. This includes the procurement of 3 GW of bulk storage through an Index Storage Credit (ISC) mechanism, 1.5 GW of retail (Community/C&I) storage, and 200 MW of residential energy storage through the VDER structure, marking a significant shift towards expanding utility-scale storage in the NYISO market to enhance grid reliability and support renewable energy integration. Our NYISO market overview covers key programs, including the Value Stack and Clean Energy Standard, providing guidance to help you understand program specifics and on to provide you with accurate project revenue estimates. We provided some background on the VDER program to help developers and investors better understand this critical framework, which you can view here . ISO-NE (ISO New England) ISO-NE is currently in the early stages of a major shift in market dynamics, transitioning into a period characterized by rapid renewable energy growth, concurrent retirement of thermal generation facilities, and a surge in storage deployment, all fueled by state policy objectives and incentives for clean energy. ISO-NE faces grid reliability challenges and peak demand concerns, making it ideal for storage solutions. We offer insights on ISO-NE’s capacity market changes and BESS opportunities in this renewable-rich region. With Camelot’s help, developers and investors can make confident investment decisions about target markets, project economics, and navigating the latest policy and regulation challenges. We work across all the major markets and developers rely on our market expertise for everything from negotiating tolling agreements to prioritizing their portfolios of merchant market ESS projects. If you're interested in any of the U.S. ISO/RTO market overviews, feel free to reach out to us at info@camelotenergygroup.com . < Back Back

Oct 10, 2024 Part 1: VDER Revenue Stack Many developers and financiers rely on the Value of Distributed Energy Resources (VDER) Calculator, a freely accessible spreadsheet calculator tool ( here ) to calculate expected VDER revenues for potential projects. While this tool is freely available and relatively easy to use, we find that it can be insufficient for accurately modeling some potential revenue streams. Some potential shortcomings of an approach relying solely on the VDER calculator could include: The VDER calculator uses only a linear degradation model and a fixed round-trip efficiency value for the life of the project. In reality, degradation follows a curve and RTE also degrades over time. The VDER calculator uses historical call periods for Locational System Relief Value (LSRV), when in actual operation, an operator would act to maximize LSRV revenues by discharging coincident with Demand Reduction Value (DRV) periods. This can result in the VDER calculator under-representing LSRV revenues. Actual Location Based Marginal Pricing (LBMP) revenues are calculated at the nodal level, while the VDER calculator uses zonal-level data, which is not sufficiently granular to accurately capture true prices. ConEd revenues are calculated by Group (A-D) and these groups are not present in the VDER calculator. So, while the VDER calculator is a helpful tool for preliminary analysis, when making an investment in utility-scale BESS, it is important to supplement this initial analysis with a more detailed revenue forecast that accounts for the many additional variables present in actual operations. Like other leading BESS market analytics experts, Camelot uses an optimized dispatch model to calculate future revenues for BESS projects participating in merchant energy and ancillary services markets. However, projects with significant programmatic revenues, like NY VDER projects, often require a more tailored approach to validate revenue streams and financial model inputs, so Camelot has built out additional tools and capabilities to incorporate these revenue streams seamlessly with applicable merchant market opportunities. We provided some background on the VDER program to help developers and investors better understand this critical framework, which you can view here . Below, we have modeled the revenue stack for a 5 MW, 4-hour Battery Energy Storage System (BESS) under the VDER program for various utilities. We estimated LSRV and Installed Capacity (ICAP) revenues manually, while using an optimized dispatch model to estimate LBMP and DRV values. Figure 1 Excerpt from Camelot Q4 2024 NY Market Outlook Report Reasons for manually modeling LSRV and ICAP Alternative 3 (Alt 3) LSRV: Since the VDER Calculator does not distinguish between ConEd Groups (A-D), it can incorrectly place LSRV revenue periods outside the DRV windows for ConEd C and D Groups. In reality, these LSRV calls would correctly align with the DRV windows in each ConEd Group, therefore we have manually adjusted the LSRV periods in ConEd C and D Groups to correct for this. For example, in ConEd Group C , 2023 historical data would suggest that the LSRV period occurs from 2pm-3pm, whereas the DRV period is from 4pm-8pm. In this case, an optimized dispatch might prioritize the DRV period, resulting in no LSRV revenues. Camelot, therefore, adjusts the LSRV revenues to reflect the more likely operating scenario wherein a BESS would gain both LSRV and DRV revenues. Regions with longer DRV windows, such as RG&E, show the greatest loss in LSRV revenues due to capacity degradation in the BESS, as the systems age and become less able to fully discharge over 5+ hour DRV windows. Regions with shorter typical DRV windows or windows capturing most of their revenue within an hour or two , such as ConEd A, were less affected by BESS capacity degradation. Figure 2 Excerpt from Camelot Q4 2024 NY Market Outlook Report ICAP Alt 3: Under the VDER program, ICAP Alt 3 is the sole option for BESS projects and is considered the most lucrative ICAP variant, though this varies by region. Monthly compensation is awarded based on injections during the annual peak hour multiplied by the ICAP Alt 3 rate ($/kW), which fluctuates monthly. Additionally, all ICAP alternatives already account for an ELCC (Effective Load Carrying Capability) adjustment, eliminating the need for further capacity accreditation adjustments. Moreover, since capacity prices fluctuates on a monthly and annual basis, we modeled ICAP manually using the 2024 VDER Calculator and applied an escalation rate based on our market outlook. Key trends and insights from the above figure results The energy component is the smallest contributor to the value stack, largely due to higher charging costs in ConEd and PSEG areas, which face elevated electricity prices caused by high demand, congestion, and transmission losses. Thought energy is discharged at a higher price, too, the difference (high minus low) in price can often be modest. Capacity prices vary significantly by NYISO load zones, making it challenging to predict capacity revenues due to the volatility of auction prices across zones. Prices could decline with the addition of offshore wind, which contributes to both energy and capacity. Historically, capacity prices have been high across Zone J (ConEd NYC) and Zone K (PSEG LI), with Zone J (ConEd NYC) averaging 2.5 times higher than other zones due to expected thermal retirements and the difficulty of integrating new renewables due to land constraints. Projects located in regions with 2 PM to 7 PM DRV windows show the best results, as these times overlap with potential system peak windows. For example, DRV revenues in ConEd and PSEG regions are much higher than in other areas, with ConEd DRV revenues 7.02 times higher than the state average and PSEG DRV revenues 2.22 times higher than the state average. In the Central Hudson utility territory, LSRV does not apply. The highest LSRV revenues are observed in ConEd and PSEG, particularly in ConEd Zone A, where LSRV revenue is 3.17 times higher than the state average. PSEG’s LSRV revenues are, on average, 1.13 times higher than the state average. Conclusions In summary, the VDER revenue stack diminishes considerably when projects are located outside of ConEd and PSEG territories. Though CAPEX and OPEX costs for upstate projects may be generally lower, this is more than offset by the more lucrative revenue streams noted in this article. In calculating these revenue streams, it is important to consider the many market nuances applicable to the VDER revenue stack. The freely available VDER Value Stack Calculator, while a good initial analysis tool, may not be sufficient in all cases to estimate accurate forward revenues and our team recommends a more detailed analysis be done to support development and financing of energy storage projects in New York State. Stay tuned for Part 2, where we will discuss and compare the VDER value stack for hybrid projects under ICAP Alt 1 and Alt 2, as well as the PV Charging Only and the PV & Grid Charging considerations. If you're interested in assessing energy storage and/or hybrid projects in NYISO’s VDER Program, feel free to reach out to us at info@camelotenergygroup.com . About Camelot Energy Group is a technical and strategic advisor to owners and investors in clean energy and energy storage projects, programs, and infrastructure. Guided by our core values of courage, empathy, integrity, and service we seek to support the energy needs of a just, sustainable, and equitable future. Our team has experience in supporting 7+GW of solar PV and 10+ GWh of energy storage and offers expertise in technology, codes and standards, engineering, public programs, project finance, installation methods, quality assurance, safety, contract negotiation, and related topics. Our services are tailored to a providing a different kind of consulting experience that emphasizes the humanity of our clients and team members, resulting in a high quality bespoke service, delivered with focus, attention, and purpose. Key services include: -Technical due diligence of projects and technologies -Owner’s representative and engineer support -Strategic planning -Training and coaching -Codes and standards consulting -Contract negotiation and support. < Back Back

< Back Mark Warner Senior Project Manager Mark Warner, a Project Manager at Camelot Energy Group, has over 5 years of experience in the renewable energy development and EPC contractor space. Mark has extensive background in project development, siting, energy analysis, design, construction planning, and permitting for commercial and utility-scale solar projects. Mark holds a Bachelor of Science Degree in Mechanical Engineering Technology from the University of Maine. mark.warner@camelotenergygroup.com

< Back Taylor Parsons Director, Technical Advisory Taylor is Camelot’s Director of Technical Advisory, and has over 10 years of experience in the energy industry. His primary focuses have been in technical due diligence, energy modeling, and analytics for solar, wind, and energy storage assets. Taylor has led some of the largest due diligence engagements for M&A on projects, platforms, and portfolios. Prior to joining Camelot, Taylor was a Team Lead and Project Manager in DNV's M&A and Energy Assessment Teams. He also supported the National Renewable Energy Laboratory's Systems Engineering team engineering and analysis for wind turbines. He has a Bachelor’s Degree in Mechanical Engineering from the Colorado School of Mines, and is actively pursuing his Executive MBA in Energy (renewables focus) from the University of Oklahoma. taylor.parsons@camelotenergygroup.com