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Role of Battery Energy Storage Systems (BESS) in the ERCOT Market

Since 2020, Texas has experienced extreme winter storms, record-setting hot summers, and rapidly growing power demand, putting the reliability and affordability of its power grid into question. As battery energy storage systems (BESS) have grown faster than all other technologies, they have been increasingly scrutinized for their impact on reliability and costs.

BESS store and shift energy, especially inexpensive energy, and convert it to critically-useful capacity resources that are dispatchable during the hours of the day when it is most needed. They also fulfill an increasing share of required market products called Ancillary Services, which help ERCOT maintain grid stability during extreme weather events or when large generators or transmission lines suddenly trip offline—a role that has historically been played by natural gas generators.

This report contextualizes and quantifies the role that BESS are playing in the Texas power market (ERCOT), in particular their contribution to reliability, costs, and their complementarity with natural gas generation. It provides an independent, fact-based, and quantitative analysis to key stakeholders and policymakers as they continue to work on grid reliability and market design in ERCOT.

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