ERCOT batteries: boom, bust, or rebound?
Show notes
It’s been a wild few years for grid-scale batteries in Texas. At the start of the decade, the Lone Star State was home to roughly 200 megawatts of battery capacity. Today, that number has skyrocketed to seventeen gigawatts…with at least five more gigawatts expected to come online by the end of 2026.
But this rapid buildout quickly led to market saturation. In the past year alone, revenues plummeted by more than 80%, far below the threshold needed for fleet operators to stay in the black.
The future of the battery market in Texas remains murky. Will the depression continue? Or will the imminent, enormous surge of data center load growth reset the state of play and bring volatility back into the mix?
In this episode, Shayle sits down with Brandt Vermillion, U.S. market lead at Modo Energy, to unpack the mechanics of the Texas battery storage market, and consider when the tide could turn back in developers’ favor. They cover topics like:
- The factors behind the recent cratering of the market
- How longer battery durations are able to capture secondary price spikes
- The degree to which weather patterns have contributed to battery demand
- Reconciling currently suppressed revenues with the hundreds of incoming gigawatts of proposed data center demand
- Whether on-site generation for hyperscaler data centers will blunt peak demand spikes and delay the return of grid volatility
- Why off-takers are considering tolling agreements to survive the market downturn
- Catalyst: 2026 trends: Gas turbines, Texas' load queue, and China electrifies
- Catalyst: Why C&I storage is finally taking off
- Catalyst: The rise of flexible data centers
- Open Circuit: Data centers have a Texas-sized energy problem
- Open Circuit: The off-grid data center fantasy
- Open Circuit: A global energy shock and the case for distributed power
- Open Circuit: Power is caught in AI’s doom loop
- Latitude Media: How the AI boom has impacted US battery storage so far
- Latitude Media: Branch Energy heads to PJM to sell battery capacity to data centers
Credits: Hosted by Shayle Kann. Produced and edited by Max Savage Levenson. Original music and engineering by Sean Marquand. Stephen Lacey is our executive editor.
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