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Not long ago, battery storage in Texas was a license to print money. Park your asset, offer ancillary services, collect generous checks. Those days are over. ERCOT’s installed battery capacity has nearly doubled from 9.5 GW at the start of 2025 to over 16 GW today, and the market has noticed. Average battery revenues collapsed from $149/kW in 2023 to under $20/kW in 2025. That is not a typo.
The culprit? Saturation. Ancillary services used to be the golden goose, representing 84% of battery revenue in 2023. By 2025 that share dropped below 50%, and in dollar terms AS revenue cratered from roughly $125/kW to just $8/kW. Arbitrage didn’t pick up the slack either, falling from $24/kW to $9/kW. Tough neighborhood all around.
What surprised me was how frequently batteries are at the margin. Despite delivering less than 1% of total energy on the grid, batteries now set the system clearing price in 23% of all hours. When they do, prices average $56/MWh, a $21/MWh premium over gas-set hours. That is the market paying up for flexibility. And batteries are not just showing up during the predictable morning and evening peaks. They reliably appear at the margin around the clock, with operators like Key Capture Energy, Jupiter Power, and Plus Power quietly establishing price floors through opportunity-cost bidding even in the middle of the night.
What does this mean? Picking your node matters more than ever. Transmission congestion is creating massive gaps between system prices and local realities, with some legacy thermal plants are clearing above $500/MWh simply because they sit behind a bottleneck. Meanwhile, batteries are now like high heat rate gas units sitting at the top of the resource stack. With 765 kV transmission builds on the horizon, the takeaway is clear: the easy money in ERCOT batteries is long gone, but there is still plenty of hard money to be made.
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