Prologis Energy has sold a 400MW/800MWh battery energy storage system (BESS) situated in Alvin, Texas, near Houston, which is located in one of the most congested zones managed by the Electric Reliability Council of Texas (ERCOT).
The company, recognized for its real estate and energy storage investments, has taken significant steps to bring this project to fruition. Prologis secured the land, finalized an interconnection agreement, obtained the necessary permits, procured long-lead equipment, and established a 20-year ground lease alongside a development services agreement. Currently under construction, the BESS is expected to reach mechanical completion for 200MW by the end of the year. Prologis anticipates that this project will directly benefit customers of Centerpoint Energy, a utility company that recently initiated the construction of a 160MW/320MWh BESS in collaboration with developer SMT Energy, located near Prologis’ site.
ERCOT continues to be a highly sought-after market for BESS development, leading energy storage installations in the fourth quarter of 2024. A recent report from Ascend Analytics, a firm focused on energy software and consulting, indicates that the projected load growth in ERCOT over the coming decade may not be achievable, particularly due to growing concerns around data center development. Dr. Brent Nelson, managing director of markets and strategy at Ascend Analytics, noted that the impending increase in electricity scarcity and price volatility could enhance revenue streams for battery storage developers and investors. However, both state and federal policies could negatively impact project developments in the region.
Founded in 1983, Prologis is primarily recognized as a logistics real estate company, but it expanded into renewable energy projects in 2007. The company deployed its first BESS in Texas in 2024, located in Arlington, co-located with a distribution center also developed by Prologis. At that time, the company expressed plans to add nine more BESS projects in the state by the end of 2025. Currently, Prologis states that it has over 8.5GW of grid-scale storage deployed and in development globally, with 47MW of storage capacity in the Americas. Its other BESS projects, which are smaller than the newly announced one near Houston, are located in Washington, Oregon, California, Arizona, and New York.
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