Texas’s booming grid battery market may be at risk after ERCOT implemented new “RTC+B” rules that change how batteries participate in energy and ancillary service markets. Storage operators warn that the rules add uncertainty and stricter charge requirements, making it riskier for batteries to provide grid-support services. Early results showed higher ancillary service prices, suggesting reduced battery participation and greater reliance on traditional power plants, raising concerns about higher costs and grid reliability during extreme weather.
Texas has witnessed the country’s most dynamic grid battery expansion in recent years, thanks in large part to its famously competitive energy markets. Now, a wonky rule change could undermine batteries’ role in the grid.
The Electric Reliability Council of Texas instituted new rules on Dec. 5 called “real-time co-optimization plus batteries,” or RTC+B. The idea is to allow ERCOT to reassign power plants between two major categories of grid activities: ancillary services, the rapid-response actions designed to keep the system stable and outage-free; and energy, the bulk delivery of megawatt-hours for consumption. […]
But a major storage developer active in ERCOT is sounding the alarm about the risks these new rules create for storage operators — and initial metrics from Day 1 of RTC+B are consistent with what you’d expect if a bunch of battery owners pulled out of the ancillary service market because of uncertainty.
The problem, according to Aaron Zubaty, the concerned storage developer, is that power plants can now be reassigned unpredictably between ancillary services and energy. That uncertainty, plus additional stipulations around minimum state-of-charge levels for batteries to be chosen for ancillary services, could limit batteries’ ability to compete in those markets, where they had become a dominant force.
Zubaty runs Eolian, which built one of the first 100-megawatt energy storage plants in ERCOT in 2021 and is now building what would be Texas’ biggest battery. He stopped bidding his merchant battery fleet into the day-ahead ancillary services markets when RTC+B took effect. […]
The behavior on Dec. 5 could prove to be a onetime blip. But if it becomes a pattern, especially on days of extreme demand, it could undo the state’s progress in tapping batteries to make the grid cheaper and more reliable for consumers. […]
If that happens, batteries probably won’t bid into day-ahead ancillary services as much as they would have under the old rules, Zubaty said. Then Texans will have to rely on a smaller number of older, more expensive natural gas and coal generators to play those essential grid-supporting roles. Constraining participation from batteries could lead prices to skyrocket unnecessarily.
It looks like that happened on an otherwise normal Friday, but the costs and stakes will be far higher when extreme weather strains the Texas grid.
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