Texas Grid Overhaul Leaves Battery Operators With More Risk, Less Upside

By Irina Slav - Dec 18, 2025

• Texas battery operators are pushing back against ERCOT’s new pricing rules.
• The pricing rules require batteries to act more like power plants and reduce lucrative ancillary services opportunities.
• Battery storage profits could come under pressure, as operators face tighter dispatch rules, higher operational requirements, and potentially lower returns.

Texas battery storage operators are pushing back after ERCOT changed how power is priced and dispatched, effectively asking batteries to behave more like power plants while reducing some of the market opportunities that made them profitable in the first place.

For years, battery storage has been described as a game-changer for wind and solar and with a very good reason. The biggest problem of both is the fact their output depends on constantly changing weather. Batteries, however, can store whatever excess electricity wind and solar produce and then release it when needed. Billions have been invested in building ever-larger batteries to do just that.

Yet battery storage has its limits and the most notable one among them is the fact that even the largest batteries in the world do not have the capacity to hold more than a couple of hours’ worth of stored electricity. This makes them rather unsuitable to be used as power plants supplying electricity over extended periods of time but there has always been an assumption that this will not be necessary. While the sun shines and the wind blows, solar panels and wind turbines would be the “power plants” and for the dark, still periods, gas, nuclear and coal would pick up the slack.

ERCOT changed this by introducing a system called real-time co-optimization plus batteries, or RTC+B. Battery arrays were until now only used for so-called ancillary services, in other words, releasing stored electricity when supply on the grid dipped and action needed to be taken instantly—something that proper power plants take time to do. Now, however, battery arrays could be called upon to act as power plants, and not everyone is happy, Canary Media reported this week.

“Storage is definitely in a different risk world than it was before RTC+B, because of added duration requirements that changed previously negotiated rules, which may not have been widely understood,” the publication cited one battery storage operator, Aaron Zubaty, owner of Eolian, as saying. The problem for battery operators is that if they are called upon to release electricity to consumers, they would have less of it left to bid for the ancillary services section of the market—which appears to have so far made them good money that the energy section of the market is not offering.

According to energy data provider and low-carbon power marketplace RESurety, the changes that ERCOT introduced this month are a positive development. “By combining the energy itself and the support functions that make the energy flow efficiently, ERCOT can have the flexibility to dispatch resources in real-time – especially batteries – to respond to moment-to-moment shifts in demand,” the company said. It added that the new pricing regime could result in annual savings of between $2.5 billion and $6.4 billion on the wholesale electricity market.

A “more optimal, least-cost dispatch across the system,” is how one energy market analysis manager described the new market organization to ESS News. However, for battery operators, it means a more complicated life with more requirements regarding the so-called state of charge, in other words, the level of electricity stored in it in percentages, and also regarding data submission to the market operator.

Because of these misgivings on the part of the battery storage sector, some players may stop bidding for the ancillary services market, which, according to industry executives quoted by Canary Media, may lead to higher prices in that market segment and, consequently, on the energy market as well. Then again, they may simply adjust to the new rules—and potentially lower profits—gradually.

By Irina Slav for Oilprice.com