Case Studies

Impact of Energy Storage on ERCOT’s Peak Winter Demand

Energy storage promoted grid reliability – and kept prices stable throughout the high demand.

For the second year in a row, extreme mid-January cold in Texas has led to morning spikes in electricity demand. In both 2024 and 2025, there was a day when ERCOT saw demand of ~78GW, which is record-breaking for winter in ERCOT. While these extreme weather and energy demand conditions were similar, energy prices looked very different year-over-year.

  • 78GW+

    Peak Electricity Demand

    On the mornings of 01/16/24 and 01/22/25.

  • ~95%

    Lower Energy Prices

    In 2025, in-part due to an increase in storage availability.

  • 5x

    Higher Available Capacity

    Higher reserve margins with >10GW available to SCED in 2025 (<2GW in 2024).

January 16, 2024

On January 16, 2024, energy prices in ERCOT’s West Load Zone soared above $2,000/MWh in the Day-Ahead Market during the critical 7-8 AM hour. Prices for Ancillary Services products also spiked, all clearing above $1,000/MW at some point before noon. 

In this context, the highest performing strategies leaned heavily on stacking Ancillary Service positions to ensure the asset was maximizing revenue.

  • Forecasted Prices

    High DA energy prices in the morning, with AS opportunity throughout the day.

  • Sample Bidding Strategy

    Offer into AS throughout the day to maximize total revenue.

  • Sample Revenue Profile

    High, consistent revenue from the mix of energy and AS.

January 22, 2025

Fast forward one year, and ERCOT faced a nearly identical situation on January 22, 2025. Load again neared 78GW in the morning hours, with demand peaking between 7-8 AM. Yet, this time, energy prices barely reached $75-100/MWh, and no AS product surpassed $45/MW — a dramatic difference from the prior year.

  • Forecasted Prices

    Comparatively high Day-Ahead energy prices in the 7-8AM hour, with limited opportunity in AS.

  • Revenue Profile

    Nearly all revenue opportunity concentrated in the morning peak.

One major difference? Batteries.
Over the past year, ERCOT’s energy storage capacity more than doubled. This allowed for a sufficient reserve margin, in addition to the ~2.5GW of storage that was discharging when demand was peaking. Together, this created grid stability and price stability.

This shift points to a crucial reality for storage operators:

  • Accurate forecasts are imperative to determine the most valuable opportunities and ensure you are choosing the right product at the right times.
  • Grid conditions are changing fast. With growing storage penetration, bidding strategies must continuously evolve to maximize returns in a more dynamic market.
Sources: GridStatus.io, Tyba Platform