Another international strategic has entered ERCOT battery storage, but not at the top of the risk curve.

Kyuden International has closed its investment in Spearmint Energy’s Tierra Seca and Seven Flags BESS projects in Texas. Each project is sized at 100 MW / 200 MWh, fully financed, grid-connected, and scheduled to reach commercial operation in December 2025. Together, they add 200 MW / 400 MWh of storage capacity to ERCOT.

The insight is straightforward: capital is concentrating on near-COD ERCOT BESS, where development risk is largely resolved but merchant upside remains intact.

These assets are not speculative storage bets. Tierra Seca is connected to the Hamilton Road Substation in Val Verde County, while Seven Flags interconnects at the Wormser Substation in Webb County. Earlier in Q2 2025, Spearmint secured roughly $250 million of financing to support construction, effectively removing balance-sheet and delivery uncertainty before bringing in strategic capital.

That sequencing matters. In ERCOT, early-stage battery pipelines remain abundant, but investor appetite has narrowed. Capital is no longer underwriting interconnection uncertainty, EPC risk, or open financing gaps. Instead, it is stepping in once projects are financed, permitted, and inside a defined 12–18 month window to COD. This transaction reflects that shift clearly.

Commercially, the risk-reward equation has changed. ERCOT’s merchant structure and nodal volatility are still attractive, but buyers want exposure to price dispersion without absorbing development slippage. Near-COD projects allow investors to price volatility while avoiding the most unpredictable risks in the value chain.

The result is a widening divide in the market. Developers capable of carrying BESS projects through financing close and construction readiness are still clearing capital efficiently. Those marketing early-stage ERCOT storage without grid or funding certainty are seeing slower processes and wider bid-ask spreads. The value inflection point has moved later—from NTP alone to a fully financed, execution-ready position.

From an execution standpoint, the implications are clear. Developers need to optimize for financing readiness as much as interconnection progress. For investors, structured or minority investments into near-COD assets are becoming the preferred entry point, allowing exposure to ERCOT upside while keeping downside tightly capped.

Kyuden’s move is not about scale or speed. It is about timing and risk compression. As ERCOT storage continues to build out, the market is signaling that certainty clears capital first.
Want to stay updated on the latest renewable energy deals and strategies shaping the future of power?

‍
Explore our latest insights, project updates, and more at Enerdatics.
Don’t forget to subscribe to our newsletter for real-time updates.