National Energy Storage Group Seeks Redesign of Texas Wholesale Market

April 13, 2014
The Energy Storage Association is joining stakeholders in seeking redesign of the ancillary services market in the Electric Reliability Council of Texas. Texas is a leader in energy storage, so keep an eye on this proceeding. It might influence ancillary services markets in other US regional transmission organizations.

We may soon hear a lot more about energy storage in Texas, where the Energy Storage Association is now contributing to wholesale market redesign efforts.

The national organization is focusing on the ancillary market within the  Electric Reliability Council of Texas(ERCOT), the regional transmission organization that serves most of the state. Ancillary services address short-term imbalances on the electric grid, such as changes in voltage and frequency.

The Texas ancillary market needs to be updated because of the state’s growing use of wind power, energy storage and other advanced technologies, according to a white paper that ESA issued late last year. ERCOT designed the market in the late 1990s based on a different generation mix, one largely made up of large steam generators. While it has evolved, the ancillary services market does not fully reflect changes brought by new and emerging technologies, according to the paper.

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The Texas Energy Storage Alliance (TESA) is among stakeholders already working on the market redesign. The state organization will fold its efforts into ESA, which serves as a forum for utility scale energy storage on a national scale.

“Texas is an important market for energy storage, and ERCOT is leading a stakeholder process that could become a model for other system operators,” said Darrell Hayslip, ESA board chairman. “Energy storage is uniquely positioned to provide immense value in the ancillary services market.”

Texas has over 450 MW of grid-scale energy storage currently in operation or planned to go into service. The state also is home to the nation’s largest battery energy storage installation – Duke Energy’s 36-MW Notrees Battery Storage Project in Goldsmith.

ERCOT is unique in that it is a stand-alone interconnection system and wholesale electricity market. This means that ERCOT cannot generally rely on the other two US interconnections (eastern and western) for balancing during emergencies or storms, making energy storage especially valuable in the state.

“Energy storage is a critical component of a reliable and responsive electricity grid,” said Suzi McClellan of Good Company Associates who led the TESA state effort and who will now represent ESA in Texas. “When TESA was first formed, the word ‘storage’ didn’t even appear in the state’s utility laws – now it does.  We have made immense progress, and merging with the ESA will allow us to have an even greater impact in Texas, and to impart lessons learned here to other critical markets.”

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About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

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