It took some time, however the Texas grid battery market is formally heating up.
Developer-owner-operator Broad Attain Energy confirmed Tuesday that it has commenced development on a pair of 100-megawatt batteries, every of which is larger than any battery vegetation at the moment working in Texas’ ERCOT energy market. They’re slated to come back on-line subsequent yr in Mason and Williamson counties, alongside 15 smaller methods rated at 10 megawatts/10 megawatt-hours every.
Houston-based Broad Attain just isn’t alone in investing large in Texas power storage: Developer Key Seize Power accomplished three methods within the state between January and April, totaling 30 megawatts. Key Seize not too long ago introduced it should end a 100 MW battery and two 50 MW vegetation in the primary half of 2021. The ERCOT interconnection queue reveals equally bold plans from photo voltaic builders and lots of different power firms.
Storage builders had largely steered away from the rough-and-tumble ERCOT market lately, constructing large in California and different locations that supply long-term offtake agreements with utilities. However Texas affords advantages that the wind trade has lengthy appreciated: comparatively straightforward land acquisition and allowing, and a aggressive market that batteries can enter with out ready for main coverage adjustments.
Approaching storage with the mindset of an impartial energy producer
Broad Attain Energy’s enterprise mannequin is indicative of what is potential in ERCOT. The group shaped barely over a yr in the past with backing from power traders Yorktown Companions, EnCap Investments and Mercuria Power. With renewable penetration rising throughout the nation however particularly in Texas — the state has greater than 30 GW of wind capability and a quickly rising base of photo voltaic vegetation — BRP wished to deal with the problem of matching provide to real-time demand.
The agency’s backing permits it to finance initiatives from its personal steadiness sheet, permitting extra room to maneuver in a brand new market with new enterprise fashions. It started working making use of them to each the high-voltage transmission interconnection queue and the distribution-level queue, which caps batteries at 10 MW.
The group attracts on backgrounds within the power buying and selling world, mentioned CEO Steve Vavrik in an interview Monday.
“We view it as a danger administration product,” he mentioned of the battery fleet. “It’s not project-by-project. We’re making a community of positions of reliability initiatives.”
As an alternative of contracting particular person batteries for particular person clients, BRP can promote a variety of companies to a variety of shoppers and dispatch its fleet in actual time to optimally fulfill these obligations.
“That is what the impartial energy producers do: They’ve a fleet of era, and so they handle it as a whole e book of provide potentialities,” Vavrik mentioned.
BRP purchased the 100 MW initiatives from one other developer, Vavrik mentioned. A detailed evaluation led BRP to guess on these nodes of the grid community, to the tune of $100 million to construct out each websites.
San Francisco-based storage developer Plus Energy did the early legwork on these two websites earlier than promoting to BRP, GTM discovered. Earlier this yr, Plus Energy additionally received a large battery contract to displace a coal plant on Oahu, Hawaii.
“Plus [Power] recognized an early alternative for storage to supply beneficial companies in Texas,” CEO Brandon Keefe mentioned. “Broad Attain was the proper companion on the time to convey this venture from [notice to proceed] to on-line.”
A number of storage traders converging on Texas
Vavrik declined to call which battery vendor is supplying the brand new methods. A of one of many firm’s 10 MW websites reveals enclosures with the brand of FlexGen, an integrator that equipped the most important battery within the state when it comes to megawatt-hour capability. FlexGen founder and CEO Josh Prueher additionally serves as chief monetary officer and managing companion at Broad Attain Energy.
Two of the deliberate 10 MW batteries are up and working already, with a complete of 10 anticipated on-line by yr’s finish, Vavrik mentioned. That signifies that BRP and Key Seize are working neck and neck for operational capability in Texas. The title of largest battery operator within the state might change arms repeatedly based mostly on the order through which these firms’ initiatives wrap up.
The broader story is that a number of skilled power traders are converging on Texas concurrently. The interconnection queue comprises greater than two dozen batteries which are every bigger than 100 megawatts; some go as much as 300, 400, even 500 megawatts.
Pace of entry into a brand new market issues: If these vegetation hit the market in time for subsequent yr’s summer time season, they will have time to become profitable on the season’s peaks with virtually no competitors from different batteries. That distinctive second will not final lengthy, although — initiatives in movement will quickly give Texas sufficient battery capability to rival a combined-cycle gasoline plant, signaling a historic shift available in the market’s era stack.