– ERCOT wants BESS resources to fulfil their ancillary service duties
– Issue of reliability and penalties for failure to provide still exists for BESS in ERCOT
– NPRR 1186 was rejected as discriminatory against BESS by the PUCT, with only support from Shell, a thermal power plant operator
ERCOT implemented new regulations to ensure BESS resources fulfill their ancillary service duties, which make up a significant portion of their revenues in Texas. Despite the rejection of NPRR 1186, the issue is not settled as ERCOT remains concerned about the reliability of BESS resources. Financial penalties are in place for failure to provide services, but they are not severe and may not be effective in ensuring reliability.
The PUCT rejected NPRR 1186 as discriminatory against BESS, with thermal power plants being the other main ancillary service providers. Shell was the only company publicly supporting the regulation. Gridmatic, an optimiser of BESS units, factors in the risk of failure to provide penalties when managing units in the market.
The Texas market is a leading hub for BESS deployments, along with California. California aims to have 8.5GW of BESS by the end of 2023, while ERCOT expects to reach 9.5GW by October 2024. The future of BESS regulation in Texas remains uncertain as ERCOT looks for new solutions to ensure the reliability of these resources in providing ancillary services.