Battery storage expands in Texas as power grid struggles with record heat

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On Wednesday night, minutes before the state’s grid operator went into emergency mode to make sure it would have enough power to meet high demand during another triple-digit day, batteries provided more electricity to Texas homes and businesses than ever before.

A small but growing number of batteries sent 2,172 megawatts to the grid on that critical evening — just under 3% of the overall supply. One megawatt can power about 200 homes when demand is high, so batteries dispatched enough electricity to power roughly 434,000 homes at that moment.

“Energy storage is increasingly a part of making ends meet from a supply point of view,” said Andy Bowman, CEO of Jupiter Power, a company that operates more than 400 megawatts worth of batteries in West Texas.

Some batteries are built to charge directly from wind or solar farms, but increasingly, stand-alone storage is being built to charge from any power source on the grid. The rows of utility-scale batteries vary from about the size of schoolhouse lockers to as large as shipping containers. Most batteries charge up when electricity is cheapest, such as early in the morning, and typically discharge for one to two hours in the evening before they need to recharge again.

Three years ago, the state grid, managed by the Electric Reliability Council of Texas, hardly had any battery power. The number has quickly increased, from 275 megawatts in 2020 to more than 3,500 operating on the grid today, and by the end of 2024, upwards of 10,000 megawatts are expected to be available. The decreasing cost of producing batteries and tax incentives through the federal Inflation Reduction Act are helping to make them more economical to build and operate, developers say.

Texas also is attractive for battery developers because large fluctuations in the price of electricity on any given day allow battery operators to buy low and sell high on the ERCOT market.

Batteries “can act like a sponge, absorbing energy when it’s in excess on the grid and prices are low only to hold it and discharge it later when demand is high and prices rise,” said Polly Shaw, chief external relations officer at Plus Power, a battery developer.

Battery supporters credit the technology for helping during tight times when every megawatt counts to keep the power on for Texas’ growing population. This summer, batteries have mostly sold their power to meet high demand around 7 p.m. or 8 p.m. when solar production winds down as the sun sets but temperatures are still high.

Energy consultant and battery advocate Doug Lewin calls that the “white knuckle part of the evening” for ERCOT, when batteries’ relatively small contribution to the grid can still be “determinative” to meeting what has been record-high demand during Texas’ second-hottest summer ever.

The emergency conditions on Wednesday were triggered because the amount of power available to the grid fell dangerously low after a transmission line in South Texas malfunctioned. Although the grid operator has repeatedly asked Texans to conserve power this summer, Wednesday was the first time this year that ERCOT entered emergency operations — which involves paying large industrial customers to reduce energy usage and importing electricity from the grid’s limited connections to neighboring states to avoid the need for rolling blackouts to reduce demand.

Advocates for battery storage say batteries will become increasingly important as the grid continues to transition to renewable power that depends on wind or sun to operate, leaving gaps when additional electricity is needed.

Texas has more wind power than any other state and the second-highest amount of solar power. How much electricity those technologies produce depends on how windy it is and whether the sun is shining. That variability creates a need for power sources that can come on no matter what the weather conditions — such as batteries or power plants fueled by natural gas or coal.

Batteries can turn on almost immediately. For example, on June 16, when a nuclear power plant tripped offline, Shaw said that Plus Power sent energy stored in Angleton to the grid to make up the difference and prevent an imbalance of supply and demand.

The state Legislature, when considering how to improve the grid earlier this year, passed a law to incentivize new gas-fueled plants to be built. Gas-fueled plants can produce electricity as long as they have fuel to power them — unlike batteries, which have a finite amount of power to dispatch before they run out — but they take longer to ramp up, and they produce greenhouse gas emissions that are fueling climate change.

“If you really wanted to push the needle further [transitioning away from fossil fuels], you’re going to need batteries to be there for the times when the wind does stop blowing and the sun is setting,” said Joshua Rhodes, a research scientist at the University of Texas at Austin.

The Legislature also excluded solar, wind and battery storage from property tax benefits passed through the Texas Jobs, Energy, Technology and Innovation Act in May. The new law provides 10-year reductions on school taxes to new business developments including oil and natural gas. Despite being locked out of the new program, battery development is still accelerating.

About 7,500 megawatts of battery storage projects set to begin operation in 2024 have already secured financing and cleared initial legal hurdles with ERCOT. In total, there are more than 100,000 megawatts of proposed battery projects through 2028, including those that have not met financial and legal requirements, a 60% increase since July 2022.

“A majority of this will not develop, but this tells you where the momentum is,” ERCOT CEO and President Pablo Vegas said during an August board meeting. “This tells you where we are going.”

Disclosure: The University of Texas at Austin has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune’s journalism. Find a complete list of them here.

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