ERCOT's Ancillary Services Market Is Sized by Forecast Error, Not by Load
Three numbers from the Texas grid, all from calendar 2025, that only mean something together.
The installed battery fleet grew by almost 80%, to more than 17,000 megawatts and 31,500 megawatt-hours. The volume of ancillary services ERCOT procured stayed roughly flat. And the cost of those services to consumers fell 60%, to $0.39 per megawatt-hour, the lowest since 2020.
A market where battery supply nearly doubles, the quantity bought does not move and price collapses is not behaving strangely. It is behaving exactly as it should. What makes it worth explaining is that the same grid is forecast to need considerably more flexible capacity over the decade that follows.
The revenue consequence was immediate. Revenue per unit of battery capacity fell 37% in a year, and ancillary services fell from 97% of an average ERCOT battery's revenue to 28%. On Modo Energy's tracking as of August 2026, the...
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