Texas Utility Sees Benefits in Potential $2B Battery Storage Rollout

Oncor Electric Delivery Co. said it's willing to invest more than $2 billion in a battery storage system in Texas after commissioning a study that found potential benefits in a state known for its partially deregulated power market.

But the Dallas-based regulated utility said Texas would need to provide legislative or regulatory clarity to make its storage rollout concept possible.

The Brattle Group, a consulting firm commissioned by Oncor to study the issue, estimated that 3,000 to 5,000 megawatts of distributed storage integrated with the grid would be the most cost-effective amount for the area managed by the Electric Reliability Council of Texas (ERCOT), the state's main grid operator.  That's assuming battery costs fall as projected in the coming years.

Oncor, the largest transmission and distribution company in Texas, serves a territory that includes parts of northern and western Texas.  Retail and generation companies in much of the state operate in a deregulated market that backers say promotes competition.
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The analysis shows that energy storage could be economical when all value chains are considered, Chris Schein, an Oncor spokesman, said in an interview.

"Oncor believes that all Texas electric market participants should be allowed to own energy storage," Schein said.  "We believe that there should not be subsidies. We believe that customers need to have economic benefit."
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Other utilities besides Oncor could be part of a storage program.  Brattle's report proposed a model in which transmission and distribution providers would invest in storage and recover costs via regulated rates under certain conditions.

"Considering both the impact on electricity bills and improved reliability of grid-integrated storage, the customer benefits would significantly exceed costs," Judy Chang, a Brattle principal and lead author of the study, said in a statement.

Chang said an efficient scale of storage "would not be reached if deployed by merchant developers who rely solely on participation in the wholesale market, or by retail customers who use it solely for back-up power, or by wires companies who deploy it solely for" transmission and distribution benefits.

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