The Electric Reliability Council of Texas (ERCOT) has initiated a programme to encourage battery energy storage systems (BESS) and other inverter-based resources to adopt grid-forming technology.
Established 26 May, the Nodal Protocol Revision Request (NPRR) “establishes a one-time advanced grid support incentive programme to encourage inverter-based resources (IBRs) that would not otherwise be required to provide advanced grid support to implement advanced grid support within 18 months of receiving the award notification.”
According to ERCOT documents detailing the programme, ERCOT staff has reviewed NPRR, which is being introduced with an intention of making the market an “an industry leader for grid reliability and resilience”, and believes it will have a positive market impact.
ERCOT is offering a one-time payment of US$1,500/MW, adjusted by an availability factor, to incentivise the adoption of grid-forming technology.
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The payment will be issued 12 months after the technology is successfully implemented and is designed to offset the cost of upgrading existing systems or installing grid-forming capability in new projects.
To be eligible for the incentive, resources must be inverter-based, primarily BESS, though solar or wind facilities with storage may also qualify. Applicants must complete an application form, comply with ERCOT’s technical requirements outlined in Section 2.14 of the Nodal Operating Guide, and demonstrate that the technology works through model quality tests as specified in Planning Guide Section 6.2.
The application process operates on a first-come, first-served basis with a cap on total incentive funding of US$25 million. Applicants are required to provide plant details, an expected implementation date, and technical demonstration of the grid-forming capability.
Grid-forming technology
Energy storage facilities that traditionally functioned primarily as backup generators are now increasingly expected to provide grid-forming capabilities, with BESS and modern inverters delivering inertia and reactive power services that were historically supplied by gas and thermal power plants with spinning turbines.
Grid-forming inverters can autonomously set and maintain voltage and frequency levels, providing a reliable anchor point for other equipment on the grid. This capability is especially critical in remote grid areas or during system disruptions when rapid stabilisation is essential.
Earlier this month, PV inverter and BESS firm Sungrow’s grid-forming power conversion system (PCS) combined established system voltage within 19 seconds during black-start testing at its large-scale, plant-level grid-forming field test base in Hefei, China.
In Australia, approximately 74% of battery storage projects in the National Electricity Market (NEM) pipeline have been confirmed to be equipped with grid-forming inverters, according to the Australian Energy Market Operator (AEMO).
NPRR background
In November 2025, the Public Utility Commission of Texas (PUCT) approved advanced grid support requirements for inverter-based ESRs, mandating that new ESRs provide advanced grid support.
Documents from ERCOT state, “Existing IBRs may also be able to provide these functions without substantial modifications. A one-time incentive programme for advanced grid support will motivate those ESRs to which Nodal Operating Guide Section 2.14, Advanced Grid Support Requirements for IBRs, does not currently apply to implement these enhancements within two years.”
Additionally, ERCOT conducted assessments to evaluate the potential benefits of ESRs. The results indicated a 5-10% potential improvement in generic transmission constraints (GTCs), including in West Texas, McCamey, and the Panhandle.
BESS are already delivering significant value for frequency control in ERCOT. In the North American Electric Reliability Corporation’s (NERC’s) 2025 State of Reliability report, it was noted that in 2024, there were multiple instances of batteries providing 100% of the total capacity for frequency regulation services in ERCOT.
The report continued, “There was an upward trend in frequency responsive capacity for the total generation fleet from 2021 to 2024, as more generators had extra capacity to respond to a frequency event. Conversely, over the same period, this extra capacity decreased for conventional generation with the difference primarily being BESS.”
While BESS assets are therefore already providing ancillary services that adjust frequency through correcting imbalances in power supply and demand, grid-forming provides the other side of proactively helping maintain the grid’s stability with inertia, voltage, short-circuit ratio (SCR) and other capabilities such as black starting nodes of the grid following outages.
