Texas has quickly become one of the leading states for the installation of solar and wind generation projects. In addition, battery energy storage systems (BESS) in ERCOT are projected to have explosive growth over the next 3, 5 and 10 years. Even though the market appears to have very healthy margins for developers, which of course aids in the growth and deployment of BESS project, BESS developers have the same challenges with maximizing the value of land holdings and land purchase options as stand-alone solar and wind developers do.
Madison Street Energy is actively working with several world class BESS developers to assist them in unlocking the value of their land holdings and purchase options in ERCOT. With the addition of Chris McKissack, MSE Senior Advisor and former CEO of leading BESS developer GlidePath Power Solutions, MSE has the precise knowledge and analytical framework to assist BESS developers in their land needs – unlike anyone in the renewable energy land space. Chris has been developing BESS systems for well over a decade, has explored and analyzed hundreds of BESS opportunities in ERCOT, and has the claim to fame of being the developer and financier of some of the very first BESS projects in the US.
S&P Global Market Intelligence has prepared an excellent and well researched article on the general economics of BESS development in ERCOT: Battery stampede spurs sunny storage economics in ERCOT | S&P Global Market Intelligence (spglobal.com). The report states that “Texas leads the US in operating and planned wind energy as well as solar and battery storage capacity in development, with a battery energy storage system (BESS) pipeline accounting for 40% of the country’s total.”
The report breaks down the economics by ERCOT region, as ERCOT is an enormous market with widely varying demand, supply, and transmission resources in different regions. It notes that “ERCOT is anticipated to offer relatively healthy battery storage economics, particularly in the region’s west zone, where most of Texas’ renewable projects are concentrated.”
For example, the following graphic sets forth the financial forecast for ERCOT West and ERCOT North BESS projects for the next 10 years.
