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Nov 09, 2024

Texas continues to break battery energy storage records

ERCOT approved six new batteries for commercial operations in September alone and Texas now has nearly 11 GWh of energy storage capacity. The fastest-growing energy storage market in the United States

ERCOT approved six new batteries for commercial operations in September alone and Texas now has nearly 11 GWh of energy storage capacity.

The fastest-growing energy storage market in the United States isn’t showing any signs of letting up.

The Electric Reliability Council of Texas (ERCOT) approved six new batteries for commercial operations in September alone, totaling more than 730 megawatts (MW) of rated power and 900 MWh of capacity, breaking its record for newly commissioned storage (by power) for the second time in the last four months.

ENGIE owns three of those batteries and more than 500 MW of that new capacity, notices Brandt Vermillion, ERCOT market lead at Modo Energy. He has been highlighting recent energy storage trends in the Lonestar State in a series of LinkedIn posts.

“ENGIE continues to complete large project after large project,” Vermillion observes, “And is now the first BESS owner in ERCOT to have more than 1 GW of total installed capacity by rated power.”

In September, ENGIE became the first BESS owner in ERCOT with more than 1 GW of installed capacity and the third with more than 1 GWh, joining Plus Power and Jupiter Power. ENGIE has exclusively constructed one-hour duration projects; Plus Power and Jupiter Power have focused more on two-hour duration projects. Modo Energy has tracked a recent shift toward two-hour resources; Six of the top seven largest BESS operators in ERCOT have average site durations of more than 1.5 hours.

Last year Plus Power secured $1.8 billion in financing to support the development of five standalone battery storage projects in Texas, a massive deal by any metrics and one of the largest ever reported. Plus Power currently operates four BESS in the market, including the 300 MW/600 MWh Rodeo Ranch Energy Storage facility in Pecos, the largest operational standalone storage facility in ERCOT. Jupiter Power operates nine energy storage systems in ERCOT; In August of this year, it commissioned the 200 MW/400 MWh Callisto I Energy Center in central Houston, one of the most power-constrained parts of the state.

Today Energy Vault announced plans to deploy a 57 MW/114 MWh BESS in Scurry County, Texas, signing a 10-year offtake agreement with Gridmatic, an AI-enabled power marketer. Construction of the Cross Trails BESS is expected to start in the first quarter of next year, with commercial operation expected by summer 2025. The BESS will be built with Energy Vault’s proprietary X-Vault integration platform using the company’s UL9540 certified B-VAULT product, and VaultOS Energy Management System to control, manage, and optimize operations.

Enel, the fourth-largest player in Texas, is finishing construction on three new utility-scale batteries in ERCOT, including its largest BESS project to date: GulfStar (355 MW), Ables Springs (115 MW), and Estonian (125 MW).

Recently, RWE broke ground on a trio of 150 MW/300 MWh BESS projects: Crowned Heron 1, Crowned Heron 2, and Cartwheel 1, each expected to come online next year.

“The growth continues to be staggering,” says Modo Energy’s Vermillion.

Through the end of October, ERCOT has 7.2 GW and 10.5 GWh of commercially operational battery energy storage capacity, figures that will soon increase as projects that have completed construction are connected to the grid.

Less than two years ago, Vermillion recalls, ERCOT had just over 2 GWh of commercially operational capacity. Texas has increased its capacity by more than that in just the last three months. Nearly 3 GWh of capacity was fully approved for commercial operations between August and the end of October. ERCOT had 4 GW at the start of the year; a total it could very well double by year’s end.

ERCOT has been a bastion of BESS development since Winter Storm Uri killed 246 people and ravaged the Texas grid in February of 2021. Since then, ERCOT’s storage capacity has grown by more than 2400%.

“This translates into substantially more energy storage capacity participating in ERCOT’s Energy and Ancillary Service markets,” Vermillion points out. “We’ll be closely monitoring the impact on the wholesale markets as 2024 draws to a close – as the flexibility of storage becomes more prominent in navigating the challenges of the evening solar ramp in ERCOT.”

In September, Ancillary Service clearing prices in ERCOT averaged just $1.93/MW/h, the lowest they’ve been since battery energy storage systems entered the market.

“This suggests that clearing prices, relative to energy prices, have reached a point at which many storage providers consider providing ancillary services less worthwhile,” acknowledges Modo’s Vermillion, who has noticed a shift toward energy arbitrage for many operators. Energy made up 35% of battery energy storage revenues in July, the highest proportion since April.

The low Ancillary Services prices are in part due to low natural gas prices, Vermillion says, but more likely have to do with the fact that the ERCOT system has experienced minimal scarcity conditions in 2024 thus far. An influx of new battery energy storage systems coming online helped ERCOT manage the summer peak season much more effectively this year than last, cutting down on opportunities to cash in.

He won’t go as far as to say ERCOT’s Ancillary Services market is saturated but doesn’t anticipate a slowdown in new batteries being added to the system anytime soon.

Everything is bigger in Texas, after all. Why would energy storage be any different?