Merchant 4-Hour Battery Storage, ERCOT
Aug 15, 2025
Tearsheet
- Asset
- TKTK: merchant 4-hour battery energy storage system
- Market
- ERCOT, TKTK zone
- Capacity
- TKTK MW AC
- Duration
- TKTK hours
- Total capex
- TKTK
- Capital structure
- TKTK
- Minimum DSCR
- TKTK
- Gearing
- TKTK
- Tenor
- TKTK
- Sponsor levered IRR
- TKTK
The question
TKTK. Two or three sentences stating the thesis: what has to be true about the ERCOT revenue stack for a merchant four-hour battery to carry project debt, and at what gearing.TKTK: an unnumbered margin note. Use it for an as-of date, a scope caveat, or a definition a project finance reader will want without breaking the line of the argument.
TKTK. State the question as a question, not as a summary of the answer.
Inputs and sources
| Assumption | Value | Unit | Source |
|---|---|---|---|
| Nameplate power | TKTK | MW AC | TKTK: interconnection agreement |
| Storage duration | TKTK | hours | TKTK: battery supply agreement |
| Usable energy capacity, year 1 | TKTK | MWh | TKTK: battery supply agreement |
| Round-trip efficiency, year 1 | TKTK | % | TKTK: OEM performance guarantee |
| Capacity degradation | TKTK | % per year | TKTK: OEM warranty schedule |
| Installed cost, battery and BOP | TKTK | $ / kWh | TKTK: EPC bid |
| Interconnection and network upgrade cost | TKTK | $ total | TKTK: ERCOT full interconnection study |
| Fixed O&M | TKTK | $ / kW-year | TKTK: long-term service agreement |
| Augmentation capex | TKTK | $ / kWh in year TKTK | TKTK: OEM augmentation quote |
| Energy arbitrage revenue | TKTK | $ / kW-year | TKTK: third-party merchant curve |
| Ancillary services revenue | TKTK | $ / kW-year | TKTK: third-party merchant curve |
| Property tax treatment | TKTK | abatement term | TKTK: county agreement |
| Investment tax credit | TKTK | % of eligible basis | TKTK: tax counsel memo |
| Debt sizing constraint | TKTK | minimum DSCR (x) | TKTK: indicative term sheet |
| All-in cost of debt | TKTK | % | TKTK: indicative term sheet |
| Project life | TKTK | years | TKTK: site lease term |
Exhibits
Findings
TKTK. What the model says.
TKTK. The result that would change an investment committee’s mind, stated plainly, with the exhibit it rests on.TKTK: a numbered sidenote. The number is generated by CSS counters, so notes renumber themselves as they are added or removed.
Limitations
TKTK. What this analysis does not establish, and which inputs it is most sensitive to.
TKTK. Where the merchant curve is doing more work than the operating assumptions, and what would have to be procured or contracted to remove that dependence.