Phenomenal Battery growth in ERCOT

As the saying goes, “Everything's bigger in Texas”, right? Well evidently it seems that way when we talk about Battery Storage deployments! 

ERCOT is booming right now, as outlined in this brilliant video from Brandt Vermillion and Wendel Hortop of Modo Energy (Modo's fantastic YouTube video channel is a must subscribe by the way!)

Some of the key takeaways:

• The rise of batteries in the ERCOT market is staggering. In late 2021, ERCOT had approx. 200MW of operational battery capacity, but since then to now there's been a 12X growth to around 4.1GW currently, with a big jump in Q1 2024. To put it into context, the UK, considered an advanced country in batteries, has approx. 4GW capacity which was built up over 8 years! The growth shows no signs of slowing with some analysts are projecting as much as 10-11GW by the end of 2024!!!
• This big boost in capacity has been caused in part by much bigger projects coming online (typically 50MW+) such as the mega Rodeo Ranch 600MWh / 300MW project
• The surge in battery build out is of course linked to the post-IRA tax incentives for builders, but has also been driven in large parts by unprecedented demand, driven heavily by the extreme weather conditions in Texas, driving volatility and the need for more back-up support for the grid. Alongside this, surging deployments of solar capacity and batteries needed for dispatch for net load ramp periods. 
• Energy revenues should remain pretty strong over the coming years, even in ancillary services although some ancillary services will reach saturation so revenues may plateau / drop (similar to UK in H2 2023, but to a lesser extent)
• Whereas demand is falling in the UK, in ERCOT, demand is increasing year on year, with 2030 peak demand is expected to almost double the current peak demand levels! It seems to be a similar story across other ISOs in the US too. The rise of industrial demands, bitcoin mining, AI-driven data centre needs, will continue to drive this demand rush! 
• Big players are moving in like ENGIE, ENEL Green Power, Tesla, and Blackrock 

With a surging battery pipeline along with renewables, this will be one of the most attractive markets for companies over the next 5 years. We have seen a rise in US attention amongst our client base, with Battery and Grid Software players setting their sights on markets like ERCOT that are showing no signs of stopping!

Hyperion Executive Search specialises in helping international clients in Renewables, Energy Storage & Grid, and EV & Future Mobility to hire the best talent senior and executive talent around the world. If you're looking for support in a crucial new search, please contact me at david.beeston@hyperionsearch.com