Aurora Energy Report Finds that Battery Facilities Saved Texas Grid Over $750M

Source: www.gulfoilandgas.com 5/23/2024, Location: North America

Since 2020, Texas has experienced extreme winter storms, record-setting hot summers, and rapidly growing power demand that have tested the state's power grid. Conditions in Texas this year indicate the coming summer will be another trying environment. Battery energy storage systems (BESS) in Texas help lessen the impact and cost of extreme weather, according to a new report from Aurora Energy Research, a leading global provider of power market analytics.

In the past three years in Texas, companies have built battery energy storage systems at a rapid pace. According to the report, BESS facilities have already proven to be a critical component of Texas' energy mix by helping the state maintain reliable, cost-effective and dispatchable power in times of high demand. They have helped address system dynamics created by intermittent renewable energy and the grid's challenging operating conditions which are exacerbated by harsh weather. The report found that in both regular and extreme conditions, batteries have helped lower system costs while enabling increased natural gas generation.

"Battery energy storage systems in Texas have come under increasing scrutiny, but our analysis shows batteries have increased reliability and reduced costs for Texans during critical days, such as last January's Winter Storm," said Olivier Beaufils, ERCOT Market Lead at Aurora Energy Research. "Interestingly, this has not come at the expense of gas-fired generation. In fact, as battery storage systems have been increasingly providing ancillary services in Texas, they have enabled an equivalent amount of natural gas generation to participate in the system, meaning that one GW of newly constructed batteries participating in the ancillary services markets have resulted in about a GW of gas-fired generation coming out of back-up services and moving into the energy markets during periods of system stress."

During more extreme conditions, BESS helped reduce costs while keeping the lights on. During the January 2024 winter freeze, BESS units saved an estimated $750 million in day-ahead market costs by fulfilling essential ancillary services and freeing up to 3GW of gas generation to meet critical energy needs and reduce prices. Throughout the summer and especially on September 6th, 2023, amid extreme summer heat and surging power demand, batteries kept the lights on and averted an emergency load-shedding event by dispatching a peak of 2GW of power when ERCOT reserves were lowest.

"Batteries store 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," continued Beaufils. "They fulfill an increasing share of Ancillary Services and 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."

The report 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.

Aurora's report primarily relies on an analysis of historical data provided by the system operator (ERCOT). This includes installed BESS capacity, market-wide supply, demand, wholesale energy prices and unit dispatch, ancillary service awards, and ERCOT operating reserves (the amount of remaining generation capacity available to the system). On slides 5 and 6 of the report, Aurora used its own modeling and forecast data to provide a forward-looking view of the crucial role that BESS and natural gas—both flexible, dispatchable technologies—will play in maintaining grid reliability as ERCOT power demand grows in the future.


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