ERCOT's Ancillary Services Market Is Sized by Forecast Error, Not by Load

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ERCOT’s ancillary services market is sized by forecast error, not load growth. Learn why battery expansion is compressing revenues & changing BESS underwriting.
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ERCOT’s battery fleet grew to more than 17 GW in 2025, yet ancillary service procurement stayed roughly flat while costs fell 60%. The reason is structural: ERCOT sizes reserves primarily around forecast uncertainty rather than total load or storage capacity. As batteries compete for a relatively fixed ancillary services market, revenue is shifting toward intraday spreads, scarcity exposure, and contracted structures. That is changing how Texas BESS projects are forecast, financed, and underwritten.