ERCOT proposes $1,500/MW incentive for legacy Texas storage to adopt grid stability support

The Electric Reliability Council of Texas (ERCOT) is advancing a concept proposal to potentially financially support older energy storage and renewable resources in adopting advanced grid support capabilities. The concept, presented to the Inverter-based Resource Working Group (IBRWG) on March 27, 2026, seeks to address legacy assets currently exempt from newer, mandatory stability requirements.

The initiative is designed to align legacy Inverter-based Resources (IBRs), particularly Energy Storage Resources (ESRs), with grid-forming standards.

In practice, this will mean a retrofit for inverters, with grid-following inverters to be replaced with grid-forming capabilities, or a “GFL-to-GFM” retrofit, involving new equipment and commissioning.

Under ERCOT’s protocols NOGRR 272 and PGRR 121, approved in 2025, only IBRs with a Standard Generation Interconnection Agreement (SGIA) signed on or after April 1, 2026, are required to provide advanced grid support (AGS) through model demonstrations and quality tests. This new Nodal Protocol Revision Request (NPRR) creates a voluntary pathway for existing assets to implement enhancements within two years of approval to help mitigate stability constraints.

The program offers a one-time payment calculated at a unit price of $1,500 per MW based on the project rating. Total program funding is capped at $25 million, assuming full payment for awarded projects. Final payouts are contingent on availability, with a resource needing to maintain greater than 90% availability during the first 12 months of operation for full payment.

The current timeline in the concept is for the new NPRR to become effective on January 1, 2027, with the following timeline for eligible projects to apply for funding:

• Application Deadline: June 30, 2027, requiring complete application forms and model quality tests.
• Evaluation Completion: September 30, 2027, with projects processed based on order of receipt and project rating.
• Operational Deadline: Advanced grid support must be implemented in operations by December 31, 2028.

The latest report on the concept proposal notes ERCOT is currently reviewing stakeholder feedback following the March presentation and plans to submit the formal NPRR by the second quarter of 2026.