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The race to construct the biggest batteries in Texas is on – Greentech Media Information

It has taken a while, but the Texan grid battery market is officially heating up.

Developer-owner-operator Broad Reach Power confirmed Tuesday that construction has begun on a pair of 100-megawatt batteries, each larger than any battery pack currently operating in the ERCOT power market in Texas. They are due to go online next year in Mason and Williamson counties, along with 15 smaller systems, each with an output of 10 megawatts / 10 megawatt hours.

Broad Reach, based in Houston, is not just investing a lot in energy storage in Texas: Between January and April, the developer Key Capture Energy completed three systems with a total output of 30 megawatts. Key Capture recently announced that it would complete a 100 MW battery and two 50 MW systems in the first half of 2021. The ERCOT connection queue shows similarly ambitious plans from solar developers and many other energy companies.

Storage developers had largely stayed away from the troubled ERCOT market in recent years, building large buildings in California and other locations that offer long-term utility purchase agreements. But Texas has perks that the wind industry has long valued: relatively easy land procurement and approval, and a competitive market that batteries can enter without waiting for major policy changes.

Approaching storage with the mindset of an independent power producer

Broad Reach Power's business model shows what is possible in ERCOT. The group was founded just over a year ago with the support of energy investors Yorktown Partners, EnCap Investments and Mercuria Energy. With renewables spreading across the country, particularly Texas – the state has more than 30 GW of wind capacity and a rapidly growing solar base – BRP wanted to address the challenge of matching supply to real-time demand.

The company's support enables him to finance projects from his own balance sheet, which creates more leeway in a new market with new business models. It had to work to apply to both the high voltage transmission link queue and the distribution level queue that limits 10MW batteries.

The team draws on backgrounds in the world of energy trading, said CEO Steve Vavrik in an interview on Monday.

"We see it as a risk management product," he said of the battery fleet. "It's not project after project. We're creating a network of positions for reliability projects."

Rather than commissioning individual batteries for individual customers, BRP can sell a range of services to a range of customers and ship its fleet in real time to best meet those commitments.

"This is what the independent power producers do: they have a generation fleet and they manage it as a whole book of supply options," said Vavrik.

BRP bought the 100 MW projects from another developer, Vavrik said. A detailed analysis prompted BRP to rely on these nodes of the network for a total of 100 million US dollars to expand both locations.

San Francisco-based storage developer Plus Power took its first steps at these two locations before being sold to BRP, GTM learned. Earlier this year, Plus Power also received a massive battery contract to displace a coal-fired power plant in Oahu, Hawaii.

"Plus [Power] recognized an early opportunity for storage to deliver valuable services in Texas," said CEO Brandon Keefe. "Broad Reach was the right partner at the time to bring this project from [note to continue] to online."

Multiple storage investors are converging on Texas

Vavrik declined to name which battery manufacturer is supplying the new systems. A photo from one of the company's 10 MW locations shows enclosures bearing the logo of FlexGen, an integrator that has supplied the state's largest battery in terms of megawatt-hour capacity. FlexGen's founder and CEO Josh Prueher also serves as chief financial officer and managing partner at Broad Reach Power.

According to Vavrik, two of the planned 10 MW batteries are already in operation. A total of 10 batteries will be online by the end of the year. This means that BRP and Key Capture are working closely together for operational capacity in Texas. The state's largest battery operator title could shift hands repeatedly due to the order in which these companies' projects are completed.

The broader story is that several seasoned energy investors come together on Texas at the same time. The connection queue contains more than two dozen batteries, each larger than 100 megawatts. Some achieve an output of 300, 400 or even 500 megawatts.

Quick entry into a new market is important: if these systems hit the market in time for next year's summer season, they will have time to make money from the peaks of the season without other batteries having to keep up. This singular moment won't last long, however – projects in motion will soon give Texas enough battery capacity to compete with a combined cycle power plant, signaling a historic shift in the market's generation stack.

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