Texas Senate passed a bill that would require at least half of new power plant capacity come from dispatchable sources other than battery energy storage systems.
The bill, SB 388, would apply to new generation beginning next year in the ERCOT region. It originally mandated the 50% threshold come from natural gas, but was amended to require “dispatchable generation other than battery energy storage.”
The bill would establish a “dispatchable generation credits trading program,” under which utilities, power generation companies and electric cooperatives would be required to offset new battery and renewable capacity with an equal amount of new dispatchable capacity. Power companies that exclusively operate battery energy storage resources would be exempt from the program.
“Battery energy storage is the most flexible resource on our grid — allowing us to quickly deliver affordable power when it’s needed most,” Daniel Giese, the Texas state director for Solar Energy Industries Association (SEIA), told pv magazine USA. “In fact, energy storage is the fastest-responding dispatchable resource with the ability to discharge power in milliseconds, charging and discharging multiple times a day.”
“If that’s not dispatchable power then I don’t know what is,” Giese said. “The simple fact is Texas needs every resource on the grid to keep prices low for consumers and meet the demands of future population and business growth.”
Giese said Texans will be “far more vulnerable to grid outages” if new generation is limited to a small number of facilities. He added, “Solar and storage are flexible and can be built almost anywhere, creating a critical backstop for the grid.”
Public Citizen, a nonprofit consumer advocacy organization that “champions the public interest in the halls of power” testified against the bill saying the threshold should be for “dispatchable resources” not “dispatchable generation.” The consumer advocacy group said that while the grid needs dispatchable energy resources, “we are not aware of any study by ERCOT, the or any other entity that had determined that proportion to be optimal, or even an improvement from the status quo.”
“Maintaining a reliable electric grid is a complex technical challenge. Solutions should be well-grounded in analysis of the relevant facts,” Public Citizen said.
The bill poses a power play in a state booming with renewable investments. Excluding California, Texas has more battery storage than the rest of the United States combined, according to the U.S. Energy Information Administration. Texas is also home to one of the world’s largest second-life, grid-connected battery energy storage installations.
Battery energy systems’ peak-load shifting not only smooths out peak demand periods and lowers grid strain, but also reduces energy costs. For example, according to the Texas comptroller, during Winter Storm Heather in 2024, energy storage units in Texas generated $750 million in market savings by delivering ancillary services and freeing up to 3 GW of gas generation to meet demand and lower prices. Thanks to energy storage systems, renewable energy sources can be integrated to the grid with greater stability.
Solar, now often paired with flexible battery energy storage, is helping serve seasonal and daily intermittent electricity demand, helping to squeeze out natural gas plants. A study from Sandia National Laboratories explores this issue and how energy storage is expected to replace natural gas peakers.
The majority of Texas residents from both sides of the aisle believe solar paired with battery systems would make the grid more reliable and resilient, a survey by the SEIA, Global Strategy Group and North Star Opinion Research found last year.
Texas’s ample land and low-key regulation environment have made it easier for developers to enter the state’s energy storage market, according to the Texas comptroller. Added to this are plunging costs of lithium-ion batteries found by a BloombergNEF analysis and the Inflation Reduction Act’s tax incentives, and energy storage’s position in the free market is bound to boom.
Whether Gov. Abbott will sign off on the bill if it passes the House remains uncertain. In December, the governor hailed the state’s achievements in both oil production, and wind and utility-scale solar generation. He added, “Here in Texas, we believe in an ‘all-of-the-above’ energy approach.”
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