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Texas and California offered intriguing, opposing examples of what batteries can do for the grid.
While cold winters in the south and hot summers across the country are the most dramatic times for electricity usage — with air conditioners blasting as weary workers return home or inefficient electric heaters strain to keep toes warm from Chattanooga to El Paso before the sun is up — it may be early spring that gives us the most insight into the lower-emitting grid of the future.
In California, America’s longtime leader in clean energy deployment, the combination of mild temperatures and longer days means that solar power can do most of the heavy lifting. And in Texas — whose uniquely isolated, market-based and permissive grid is fast becoming the source of much of the country’s clean power growth — regulators allow the state’s vast fleet of natural gas power (and some coal) power plants to shut down for maintenance during the mild weather, giving renewables time to shine.
And not just renewables: Both Texas and California saw remarkable usage of batteries on the grid this week. If the whole country’s grid is ever going to be decarbonized, other grids will have to start looking at what's happening in America’s two largest states.
At 7:30 p.m. Central Time on Tuesday, with 20,000 megawatts of power unavailable due to planned outages of thermal power plants, batteries were providing 1.7 gigawatts of power to the Texas grid, slightly more than solar, while wind was providing 5.5 gigawatts. Four hours earlier, solar and wind combined for almost 25 gigawatts. Real-time prices Tuesday evening topped out at over $4,000 per megawatt hour, getting close to the $5,000 cap imposed after blackouts and price spikes of Winter Storm Uri in 2021.
“There was a substantial amount of physical capacity available still,” Connor Waldoch, co-founder of the electricity monitoring company Grid Status, told me, referring to generation that was capable of selling power to the grid but was being kept off in case of an emergency. “ERCOT,” the organization that governs the Texas grid, “has been operating conservatively for the last few years,” he said. Temperatures were also high late in the day, with temperatures in the 80s in the evening parts of Texas, leading ERCOT to ask some plants to delay their scheduled maintenance.
According to Grid Status, there was more battery storage on the Texas grid Tuesday than at any point since high temperatures tested its stability last September. That combined with high prices in the real-time energy market meant a huge payday for battery storage operators. When there are more planned outages for natural gas, Waldoch explained, batteries are bidding “at the very tippity top” and likely earning huge revenues in just a few a hours.
But all those batteries are not necessarily helping decarbonize Texas’ electricity system by charging when there’s a lot of cheap solar and discharging when renewables are scarce and prices are high.
That’s because battery systems in Texas make the lion’s share of their revenues by providing what’s known in Texas as “ancillary services.” ERCOT pays battery operators to be available if the grid needs power quickly — and then they get paid again for the power they provide when called upon.
The spike in prices and battery operators' response be a sign that the battery market is maturing. In 2023, according to the battery storage data service Modo Energy, Texas battery operators earned around 85% of their revenue from providing ancillary services. For battery developers, earning money this way is ideal because it means less wear and tear on battery systems as they charge and discharge.
That said, the portion of revenue that battery systems earn from selling actual energy almost tripled from 2022 to 2023; Brandt Vermillion, Modo’s ERCOT lead, estimated that installed battery capacity would double in ERCOT in 2024, while the amount of ancillary services would stay “more or less fixed.” As the supply of battery capacity gets closer to and possibly exceeds demand for ancillary services, those prices will fall, Vermillion said. Over time, “energy arbitrage” — charging when prices are low and discharging when prices are high — will become a more and more attractive way to earn revenue.
To get a sense of what that will look like, Texas battery storage operators should look west.
In California this week, conditions were more, well, pacific. At 8 p.m. Pacific Time on Tuesday night, there were around 6 gigawatts of battery storage discharging onto the grid, more than the 5 gigawatts of natural gas or the 4.5 gigawatts of hydro power at the time. Batteries were the largest source of power on the grid.
This was a signal moment for California, which has been procuring and deploying grid batteries at a breakneck pace, and even retooled its residential solar program to encourage home battery storage. California’s grid has over 7 gigawatts of installed battery storage, according to the Energy Information Administration, the most of any state, while Texas, in second place, has just over 3 gigawatts. (There are another 300 utility-scale battery projects in the pipeline for 2024, according to the EIA, with about half of them planned for Texas.)
In California, the so-called “saturation” of ancillary services by batteries is far more advanced, and the portion of revenues earned by battery systems by providing them has decreased.
“Ancillary services have gone from taking up the majority of battery capacity to only a small fraction,” according to a report by the California Independent System Operator. By the end of 2022, the majority of battery revenue came from the energy markets, not ancillary services, the report said.
Thanks to the magnitude of solar in California, Grid Status’ Waldoch explained, “almost every day there’s a long negative- or low-price period” — an ideal time for carbon-abating energy arbitrage.
Batteries that are most carbon-abating tend to power themselves when transmission is congested, which essentially “strands” renewables on the grid, or when they would otherwise be curtailed, when there’s too much renewable power available compared to demand, explained Emma Konet, co-founder of Tierra Climate, which is working to set up a voluntary carbon market to encourage carbon-abating battery usage. When the company examined Texas’ battery market in 2022, it found that only about a fifth of batteries were actually abating carbon.
In fact, the most carbon-intensive battery system in Texas that Tierra Climate looked at was also its most profitable, making the lion’s share of its revenue in the ancillary services markets; the most carbon-abating didn’t participate in the ancillary services markets at all, and was paired directly with a solar project.
Texas's energy market is simply not structured in a way such that there's a good correlation between low prices and low emissions for charging and high prices and high emissions when batteries discharge, Konet told me. (The best way to align batteries with lower emissions, she added, would be a carbon tax of at least $50 a ton.) While Tierra Climate hasn’t looked in detail at California, Konet said California’s battery systems are more likely to be carbon-abating because of the prevalence of storage projects paired with renewable generation.
There’s probably no worse way to encourage Texas to do something than by pointing to California as a positive example. Still, if Texas’ battery storage industry is ever going to turn into something more than an adjuster pedal for its existing grid mix, it’s going to have to get a little more Left Coast — or at least move a little closer to those solar panels.
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Congressional Democrats will have to trust the administration to allow renewables projects through. That may be too big an ask.
How do you do a bipartisan permitting deal if the Republicans running the government don’t want to permit anything Democrats like?
The typical model for a run at permitting reform is that a handful of Republicans and Democrats come together and draw up a plan that would benefit renewable developers, transmission developers, and the fossil fuel industry by placing some kind of limit on the scope and extent of federally-mandated environmental reviews. Last year’s Energy Permitting Reform Act, for instance, co-sponsored by Republican John Barrasso and Independent Joe Manchin, included time limits on environmental reviews, mandatory oil and gas lease sales, siting authority for interstate transmission, and legal clarity for mining projects. That passed through the Senate Energy and Natural Resources Committee but got no further.
During a House hearing in July, California Representative Scott Peters, a Democrat, bragged that a bill he’d introduced with Republican Dusty Johnson to help digitize permitting had won support from both the Natural Resources Defense Council and the American Petroleum Institute — two advocacy groups not typically speaking in harmony. (He’s not the only one taking a crack at permitting reform, though: Another bipartisan House effort sponsored by House Natural Resources Committee chairman Bruce Westerman and moderate Maine Democrat Jared Golden would limit when National Environmental Policy Act-mandated reviews happen, install time limits for making claims, and restrict judicial oversight of the NEPA process.)
But unless Democrats trust the Trump administration to actually allow renewables projects to go forward, his proposal could be dead on arrival. Since the signing of the One Big Beautiful Bill Act on July 4, the executive branch has been on the warpath against renewables, especially wind. With the Trump administration’s blessing, OBBBA restricted tax credits for renewable projects, both by accelerating the phaseout timeline for the credits (projects have until July of next year to start construction, or until the end of 2027 to be placed in service) and by imposing harsh new restrictions on developers’ business relationships with China or Chinese companies. Mere days after he signed the final bill into law, Trump directed the Internal Revenue Service to write tougher guidance governing what it means to start construction, potentially narrowing the window to qualify still further.
“I think all of this fuzz coming out of the Trump administration makes trust among Democrats a lot harder to achieve,” Peters told me this week.
In recent weeks, Trump’s Department of the Interior has issued memos calling for political reviews of effectively all new renewables permits and instituting strict new land use requirements that will be all but impossible for wind developments to meet. His Department of Transportation, meanwhile, insinuated that the department under the previous administration had ignored safety concerns related to radio frequencies while instituting onerous new setback requirements for renewables development near roadways.
Peters acknowledged that bipartisan permitting reform may be a heavy lift for his fellow Democrats — “a lot of Democrats didn’t come to Congress to make permitting oil and gas easier,” he told me — but that considering the high proportion of planned projects that are non-emitting, it would still be worth it to make all projects move faster.
That said, he conceded that his argument “loses a lot of force” if none of those planned non-emitting projects that happen to be solar or wind can get their federal permits approved. “How can I even make a deal on energy unless I get some assurance that will be honored by the President?” Peters told me.
Other energy and climate experts broadly supportive of investment-led approaches to combatting climate change still think that Democrats should push on with a permitting deal.
“All of this raises the importance of a bipartisan Congressional permitting reform bill that contains executive branch discretion to deny routine permits for American energy resources,” Princeton professor and Heatmap contributor Jesse Jenkins posted on X. “Seems like there's a lot of reasons for both sides to ensure America's approach to siting energy resources doesn't keep ping-ponging back and forth every four years.”
But permitting reform supporters are aware of the awkward situation the president’s unilateral actions against renewables puts the whole enterprise in.
“The administration’s recent measures are suboptimal policy and no doubt worsen the odds of enacting a technology-neutral permitting reform deal,” Pavan Venkatakrishnan, an infrastructure fellow at the Institute for Progress, told me.
At the same time, he argued that Democrats should still try to seek a deal, pointing to the high demand for electrons of any type. Not even the Trump administration can entirely choke off demand for renewables, so permitting reform could still be worth doing to ensure that as much as can evade the administration’s booby traps can eventually get built.
“Projects remain at the mercy of a burdensome regulatory regime,” Venkatakrishnan said. “Democrats should remain committed to an ambitious permitting deal — the best way to reduce deployment timelines and costs for all technologies, including solar-and-storage.”
Venkatakrishnan also suggested that Democrats could, in a bipartisan deal, seek to roll back some of the executive branch actions, including the Interior memo subjecting wind and solar to heightened review or the executive order on the definition of “begin construction.” There would be a precedent for such an action — the 2024 Manchin-Barrasso permitting reform bill attempted to scrap the pause on liquified natural gas approvals that the Biden administration had implemented. But then of course, that didn’t ever become law. (Manchin and congressional Republicans were able to clear the way to permitting a specific project, the Mountain Valley Pipeline in a larger bipartisan deal.)
What could unlock a deal, Yogin Kothari, a former congressional staffer and the chief strategy officer of the SEMA Coalition, a domestic solar manufacturing group, told me, would be the Trump administration getting actively involved. “The administration is probably going to have to lead,” Kothari said. “It’s going to be up to folks in the administration to go to the Hill and say, We do need this, and this is what it’s going to mean, and we’re going to implement this in good faith.”
This would require a delicate balancing act — the Trump administration would have to think there’s enough in a deal for their favored energy and infrastructure projects to make it worth perhaps rolling back some of their anti-renewables campaign.
“The administration is going to have to convince Democrats that it’s not permitting reform just for a subset of industries,” i.e. oil, gas, and coal, “but it is really technology neutral permanent reform,” Kothari said. “On the Senate side, it comes down to whether seven Senate Democrats feel like they can trust the admin to actually implement things in a way that is helpful across the board for energy dominance.”
One reason the administration itself may have to make commitments is because Congressional Democrats may not trust Republicans to stand behind legislation they support and vote for, Peters told me.
“Obviously we’d have to get some face-to-face understanding that if we make a deal, they’re going to live by the deal,” he said.
Peters pointed to the handful of Republicans who successfully negotiated for a longer runway for renewable tax credits, only to see Trump move almost immediately to tighten up eligibility for those tax credits as reason enough for skepticism. He also cited the cuts to previously agreed-upon spending that the Trump administration pushed through Congress on a party line vote as evidence that existing law and deals aren’t necessarily stable in Trump’s Washington.
“If we do a deal — Republicans and Democrats in Congress, the House and Senate, get together and make an agreement — we have to have assurance that the President will back us,” Peters told me.
No bipartisan deal is ever easy to come by, but then historically, “everybody lives by it,” he said. “I think that may be changing under this administration, and I think it makes everything tougher.”
And more of the week’s most important conflicts around renewable energy.
1. Sussex County, Delaware – The Trump administration has confirmed it will revisit permitting decisions for the MarWin offshore wind project off the coast of Maryland, potentially putting the proposal in jeopardy unless blue states and the courts intervene.
2. Northwest Iowa – Locals fighting a wind project spanning multiple counties in northern Iowa are opposing legislation that purports to make renewable development easier in the state.
3. Pima County, Arizona – Down goes another solar-powered data center, this time in Arizona.
4. San Diego County, California – A battery storage developer has withdrawn plans to build in the southern California city of La Mesa amidst a broadening post-Moss Landing backlash over fire concerns.
5. Logan and McIntosh Counties, North Dakota – These days, it’s worth noting when a wind project even gets approved.
6. Hamilton County, Indiana – This county is now denying an Aypa battery storage facility north of Indianapolis despite growing power concerns in the region.
They don’t have much to lose, Heiko Burow, an attorney at Baker & Mackenzie, tells me.
This week, since this edition of The Fight was so heavy, I tried something a little different: I interviewed one of my readers, Heiko Burow, an attorney with Baker & Mackenzie based in Dallas, Texas. Burow doesn’t work in energy specifically – he’s an intellectual property lawyer – but he’s read many of my scoops over the past few weeks about attacks on renewable energy and had legitimate criticism! Namely, as a lawyer who is passionate about the rule of law, he wanted to send a message to any developers and energy wonks reading me to use the legal system more often as a tool against attacks on their field.
The following conversation has been abridged for clarity. Let’s dive in.
So Heiko, you reached out to me after my latest scoop about how the Trump administration is now trying to create national land use restrictions on wind projects through the Department of Transportation. In your email, you said the Trump administration “cannot invent a setback requirement by executive fiat.” What does this mean?
Something you need to understand from my point of view is, there’s all these things coming out of the White House, the executive. Like the setback requirement: If the law says they have the right to do that, then okay. But the viewpoints of the administration do not replace the law.
There’s no requirement in the law that the Secretary of Transportation can require a setback. He can’t just come in and say here’s a required setback. The government can only do what the law allows a government to do.
For example, a CEO can’t come into a company and say all the contracts are null and void. The president, in the same way, can’t say everything that’s legally binding is no longer legally binding. There are two ways that creates a problem: one is that it is a breach of contract, and the courts will say there’s a different remedy for that. But there’s also a constitutional problem with that.
Why did you reach out to me about this story, in particular?
I’m just concerned about the environment, and our country, and our democracy.
As someone who works with corporations navigating the legal system under Trump, why do you think companies – like renewable developers – aren’t suing left and right in this moment?
I think they’re timid.
It’s not just companies – it’s stakeholders in general. In 2017, there was pushback on Trump. That is missing. Look at the tech industry – and a lot of investments in renewable energy come from the tech area – and how they lined up with Trump on Inauguration Day.
That is fear. I’d say other stakeholders too are now ruled by fear.
As someone who advises companies in other areas of law, what posture do you think renewable energy companies should take?
Band together. Renewable energy companies, you don’t have much to lose. He’s persecuting you.
I know people stay under the radar, like community solar entities that he could have forgotten about. But he didn’t forget about them. So they need to band together and fight.
Everybody’s just lying low and being afraid. But how much more can renewable energy companies lose? Right now they’re still surviving, because the business case for renewable energy works and states are supporting it. But they’re quiet about it on the national level.
If people start believing what Trump says is the force of law, then it’ll just be that way. And I don’t see a coordinated response to that.