Because of ERCOT’s Four Coincident Peak (4CP) transmission charge structure, even a brief spike in load during specific summer intervals can drive millions of dollars in annual costs for large industrial facilities. Installing a battery energy storage system can significantly reduce that exposure.
Further, Texas’ peak demand is projected to rise from 87 GW in 2025 to 138 GW by 2030, an increase of nearly 60%. Now is the time for energy-intensive businesses to evaluate—and get started on—a battery energy storage system (if you haven’t done so already).
Recent reports show the data center demand spike could drive a 79% ERCOT price hike in 2027—which means your business needs to put a plan in place today.
Pro tip: it takes a couple years to develop an on-site battery storage system to lower your Coincident Peak (4CP) charges and capture additional revenue streams BUT Convergent Energy and Power can make sure you’re hedging against future price spikes if we get started now.
This blog outlines the benefits of battery storage for plants operating in ERCOT and how Convergent Energy and Power can take the hassle out of energy storage for you and your facility.
Why ERCOT’s 4CP Charges Can Be a Large Portion of Power Costs
ERCOT allocates transmission costs using the Four Coincident Peak (4CP) methodology. The grid identifies the single highest 15-minute demand interval in each summer month (June–September), and a facility’s demand during those four intervals determines its transmission charges for the entire next year. These events typically happen during summer afternoons, when demand is highest on the electric grid, or during other extreme weather events like Winter Storm Uri.
Key implications:
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Just one hour of demand across the year can drive transmission charges.
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These charges can represent ~30% of an industrial electricity bill.
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For a 50–100 MW plant, the potential savings can reach millions of dollars per year.
Beyond 4CP: Additional Value Streams for Industrial-Scale Battery
For many facilities, 4CP reduction alone often justifies a battery storage system—but batteries can also generate additional value beyond reducing coincident peak demand:
⬇️ Demand charge management: Reduce non-coincident peak demand charges
💰 Energy arbitrage: Charge during low-price periods and Discharge during high prices
🔌 Backup power / resilience: Maintain critical operations during outages
✅ Participation in ERCOT markets: Potential services including Ancillary Services, Demand response, and Real-time price optimization
Stacking these revenues improves battery storage system economics and helps customers maximize value of energy storage.
Convergent Energy and Power: Proven Battery Storage Expertise
Now is the time for Texas’ chemical facilities to capitalize on the challenges facing the electric grid in ERCOT and take control of their energy future—and energy costs. Texas is rapidly deploying batteries partly for this purpose. The growth of flexible resources such as storage and demand response is already reshaping the 4CP landscape in ERCOT.
For 15 years, Convergent Energy and Power (Convergent) has gained deep expertise by working closely with industrial businesses to take the hassle out of on-site renewable solutions by building, owning, and operating systems on our customers’ behalf. In that time, we’ve reduced peak demand charges for business like Shell New Energies, and Ford.
Convergent has over 900,0000 hours operating energy storage systems that deliver peak shaving and grid reliability and have reduced our customers’ utility bills by up to 40%. Further, we have $1bn invested in or committed to energy storage systems, with over 800 MW operating or under development.
The best part: there’s no capital required from your business. The shared-savings contract Convergent offers means we share in the upside and only make money if our customers do.
Our tagline is “Powered by Results.” We have delivered millions in savings to our industrial customers while enabling them to access more affordable and more reliable power. This opportunity is a win for all involved.
If you’re looking to future-proof your facility with an on-site battery storage system, schedule a free, no-obligation introductory call with our team today.
Griffin Atkinson is a manager on the Business Development team where he supports the origination of behind-the-meter projects in the U.S. and Canada.
