The West Texas battery energy storage system, built in partnership with construction firm Mortenson, is Spearmint''s debut grid-scale project. Spearmint said the Revolution system is among the largest grid-scale energy storage projects in the United States.
The energy company said the project was completed on budget and on-schedule, with the help of a $92 million tax equity investment last October from Greenprint Capital Management. Spearmint said that funding was one of the first times the Investment Tax Credit structure, included among the Inflation Reduction Act''s $369 billion in clean energy spending, was used for a standalone battery project.
Mortenson provided the project a 34-person workforce, who worked an estimated 42,000 hours in order to install the project''s 134 battery containers, according to the press release. Sungrow provided Revolution''s 6,432 battery modules and 45 power conversion system units.
"[Spearmint] look[s] forward to supporting Texas'' growing demand for electricity — particularly in the face of climate change and rising natural gas and oil prices — for years to come," Andrew Waranch, Spearmint''s founder, president and CEO, said in the press release.
While Revolution becomes Spearmint''s first operational project, the company purchased a portfolio of three other battery storage projects in Texas last March. Those projects, still under development, are 300 MW each and known as Nomadic.
The financial terms and former developer were not disclosed, but — without naming the company — Spearmint said at the time it had acquired the 900 MW portfolio from one of the largest developers and operators of clean energy projects in the nation. That project will also be managed by ERCOT once operational, and, with the Revolution and Nomadic systems, Spearmint is one of the largest battery storage companies in the state.
In EIA''s latest projections for the battery storage market, the agency estimated national capacity will grow 89% in 2024 to reach 30 GW. As battery storage projects are often co-sited with wind and solar energy projects, EIA estimates Texas will add 3.2 GW of capacity this year to support its large and still-growing renewable energy portfolio.
Distributed standalone energy storage continues to be an in-demand technology in the Texas ERCOT region, as a new joint venture between Regis Energy Partners and Excelsior Energy Capital dubbed REX Storage Holdings committed $400 million to energy storage development in the region.
The portfolio begins with the announcement of four distributed standalone 9.9 MW battery energy storage systems. Regis Energy Partners will operate as independent developer, owner, and operator, while Excelsior will act as an investment fund. The initial four battery systems are expected to come online in 2023.
Energy storage developer Stem will provide battery hardware and operate its AI-powered energy management software system. Stem will also offer in-market solutions for ERCOT development and provide ongoing services once the batteries are operational.
Standalone energy storage systems now offer greater value under the Inflation Reduction Act of 2022, which extends the 30% investment tax credit to the technology. Previously, only co-located batteries paired with renewable energy generation were eligible for the credit.
In 2021, Winter Storm Uri became a landmark example of the unpredictability of climate, and its harsh impact on the legally mandated core requirements of electric utility companies: to provide electric service reliably and to furnish just and reasonable prices to customers.
The electric grid''s functional collapse during the storm was an example of the ERCOT grid''s failure of achieving those mandated goals. By some estimates, the storm caused $130 billion in near-term economic damages, and the long-term consequences have not yet been fully assessed.
The sudden spike in unplanned-for energy demand caused by extreme weather led to wholesale market spot prices skyrocketing up to $9,000/MW, and that price held for over three days. Historically, the price cap is only hit momentarily, and pressures are relieved quickly.
This unprecedented price spike was caused by a combination of nonfunctioning natural gas equipment, and congestion on the grid from intense localized energy demand, that caused substations to cut power to stabilize the grid. A study by the Federal Energy Regulatory Commission found 87% of the outages were caused by issues with natural gas supply as uninsulated stations failed to function.
The figures highlight two problems. First, the centralized grid is failing the people who rely on it. Second, the climate is adding more pressure that will need to be dealt with to keep these systems running adequately.
This is where energy storage comes into play, and where intelligent planning of the grid is critical. At RE+ San Antonio, residential installer Sunrun shared that its home battery systems provided 234,000 hours of backup power following Winter Storm Uri. Interest in batteries skyrocketed, with hits on Sunrun''s battery-related website pages increasing 350% in the direct aftermath. This backup was about more than just comfort, but also about safety. Uri took an estimated 246 lives in Texas.
The financial cost of such events is massive, too. Retail energy providers who did not properly hedge against the risks of the volatile ERCOT wholesale market were hit with fees so sharp that many went out of business overnight. Homeowners in predatory contracts were also exposed directly to the wholesale market, and many were faced with multi-thousand-dollar utility bills.
Congestion on the grid was a key cause of the problem. Delivering power from generation centers in remote places across long distances to load centers in large cities often runs into bottlenecks, leading to curtailment and scheduled blackouts.
A vast bulk of the large-scale solar projects are in the western, sunnier part of Texas, and are delivered to population centers in the east. The issue can be looked at as a microcosm of the entire United States, where legislators are suggesting building a transmission superhighway from the west to the eastern seaboard.
Congestion rents, or the cost of transmission services, are expected to worsen in many areas across ERCOT, despite hundreds of millions of dollars planned to build transmission to alleviate the congestion.
Solar and batteries can serve a critical role in alleviating this congestion, reducing renewables curtailment, smoothing the curve of wholesale market demand spikes, and providing critical backup power in times of crisis.
When located closer to load centers, or the location of energy demand, batteries can readily dispatch backup power. By locating the batteries as "nodes" further down the grid, pressure is taken off key bottlenecks like substations, which shut down in times of extreme peak demand, and are extremely expensive to upgrade.
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