The Electric Reliability Council of Texas Inc., which manages the state's primary wholesale power grid, is about to add another major energy storage asset roughly 55 miles northeast of Dallas, where Acciona Energía is putting the final touches on its 190-MW/380-MWh Cunningham Battery Storage Project.

Commissioning is underway at the lithium-ion battery storage station in Hunt County, Texas, a spokesperson for the affiliate of Spanish power generation giant Acciona SA said in an April 4 email. The project, which Acciona Energía purchased from Hanwha Q Cells USA Corp. in December 2022, "will operate fully merchant" on the ERCOT grid, the official added.

Once the Cunningham complex is commissioned, it will join Eolian LP's recently completed Madero and Ignacio battery systems in Mission, Texas, which also operate without long-term customer contracts, as the first fruits of a valuable new US tax incentive for stand-alone energy storage. They are among a fleet of ERCOT-connected battery projects totaling more than 4 GW of power storage capacity that the grid operator anticipates will come online this year, helping to balance rising volumes of variable solar and wind generation.

Those additions could catapult Texas ahead of California as the nation's leading market for electrochemical energy storage systems, according to S&P Global Market Intelligence data.

"We have a lot of megawatts of battery [storage] already connected and lots more coming," Nitika Mago, manager of balancing operations planning at ERCOT, said April 4 during a webinar hosted by the Energy Systems Integration Group, a nonprofit educational organization.

Entering March, ERCOT had integrated about 3,014 MW of battery resources, mostly short-duration systems with one to two hours of energy storage capacity. That portfolio could grow to roughly 7.8 GW by the end of 2023 and more than 12 GW by the end of 2024, according to grid operator data.

The expected Texas energy storage surge in 2023 and 2024 may be just the beginning. More than 96.3 GW of battery power storage capacity is in the ERCOT interconnection queue, according to Mago.

"Now, of course, not all of it will materialize, but that still is a significantly large number," Mago said.

Arbitrage, ancillary service opportunities

ERCOT-connected batteries have become active participants in energy and ancillary service markets, both of which are important revenue streams for a grid without a capacity market.

The S&P Global Market Intelligence Power Forecast outlined "high arbitrage opportunities" for battery storage systems in ERCOT's domain, through charging on cheap surpluses of wind and solar and then discharging when wholesale power prices spike, according to a recent report.

The share of ancillary services provided by energy storage, which includes frequency response and other essential grid functions, "has increased tremendously" in ERCOT territory, Mago said.

Energy storage resources provided nearly 70% of two specific types of ancillary services in the first quarter of 2023, according to the official. Batteries accounted for 68% of reserves using primary frequency response in the period, up from only 3% in the first quarter of 2021. Batteries also provided 69% of "regulation up" services in the first three months of 2023, compared with only 17% two years earlier.

"So that's a significant change," Mago said.

Batteries have taken share for those ancillary services largely from fossil fuel-fired power plants.

'Performance issues'

ERCOT expects batteries to further boost their share of ancillary services in coming quarters. But Mago flagged some concern around "operating risks," like whether assets would always preserve a sufficient state of charge.

The grid operator "has seen performance issues in some cases," Mago said. "Lack of performance may increase reliability risk, and hence, where appropriate, ERCOT is also working on identifying systemic ways to mitigate the risks."

As ERCOT's energy storage fleet continues to expand, modeling and accounting for battery resources "is becoming increasingly important," Mago said.

ERCOT plans to outline the further evolution of energy storage in its territory in a forthcoming roadmap, Mago said.

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