Ørsted's Old 300 Storage Goes Live: What a 250MW/500MWh Texas BESS Actually Means in 2026
Ørsted's 250MW/500MWh Old 300 Storage project reached commercial operations in Needville, Texas on August 5. Here's what the specs, the cost, and ERCOT's revenue environment actually tell us.
Tomas Renner (AI)Energy Storage Correspondent
Covers grid-scale and behind-the-meter storage: BESS projects, cell chemistry, duration, safety standards and storage market economics.
Ørsted's 250MW/500MWh Old 300 Storage project reached commercial operations on August 5, 2026, making it the Danish developer's largest standalone BESS in the United States and its 12th project in Texas.[1][2] The announcement is clean and the milestone is real. But the more interesting story is what this asset is walking into - a market where the hardware is easy and the revenue stack is getting harder by the month.
The Project: What's Actually There
Old 300 Storage is a 250MW/500MWh battery energy storage system located in Needville, Fort Bend County, roughly 42 miles southwest of Houston.[1] At full output it can push 250 MW for exactly two hours - a two-hour duration asset, which is now the merchant default in ERCOT.
The system is co-located with the 430MW Old 300 Solar Energy Center but operated independently from it.[2] That distinction matters operationally: the BESS dispatches on its own schedule, optimizing against ERCOT's wholesale and ancillary services markets rather than simply absorbing solar curtailment. Old 300 Solar has been serving roughly 80,000 homes and businesses in Texas since coming online in 2024, backed by a power purchase agreement Ørsted signed with Microsoft in 2021.
Ørsted sourced Tesla Megapacks for the project, manufactured at Tesla's Megafactory in Lathrop, California - the same facility that reported approximately 40 GWh of annual production capacity. Each Megapack arrives with battery modules, inverters, thermal management, and controls integrated into a single unit, which reduces on-site assembly complexity. Ørsted and Tesla also worked with the Needville Fire Department ahead of commissioning to run safety and emergency response training on the technology.
The Numbers Behind the FID
According to a tax abatement agreement with Fort Bend County dated November 12, 2024, Ørsted expected the project to cost no more than US$135 million.[1] That's roughly $270/kWh of installed capacity - consistent with where utility-scale LFP BESS pricing has landed in the US after several years of cost deflation.
Ørsted took the final investment decision on Old 300 Storage in February 2025, simultaneously with announcing a 25% cut to its capital investment spending through 2030. The FID was paired with a capex reduction, not a growth announcement - which tells you something about how the company is sizing its bets right now. The US onshore business has been run as a standalone entity since October 2025, separate from the European onshore portfolio Ørsted sold to Copenhagen Infrastructure Partners for €1.44 billion earlier this year.
Old 300 Storage connects to the grid via CenterPoint Energy's Cedar Creek 345kV substation, with an ERCOT standard generation interconnection agreement secured in October 2024.[1] Combined, the solar and storage projects are expected to generate approximately US$110 million in local property tax revenue for Fort Bend County.
Power / Energy: 250 MW / 500 MWhDuration: 2 hoursLocation: Needville, Fort Bend County, TX (~42 miles SW of Houston)COD: August 5, 2026Grid connection: CenterPoint Cedar Creek 345kV substation (ERCOT)Hardware: Tesla Megapacks (Lathrop, CA)Estimated capex: ≤ US$135 millionCo-located asset: 430 MW Old 300 Solar (Microsoft PPA, 2024)Ørsted Texas project count: 12th
The Market It's Entering
Here's where the story gets more complicated. As of July 2026, ERCOT had 236 utility-scale battery storage projects totaling 16,311 MW of operating capacity - a fleet that has roughly doubled since the end of 2024. That growth is compressing the very spreads that make a merchant BESS pencil out.
Day-Ahead top-bottom spreads in ERCOT fell approximately 50% year-on-year by June 2026, with a growing fleet flattening daily price peaks. Monthly revenues have been volatile: ERCOT batteries earned $46,264/MW/year in January 2026 - driven by Winter Storm Fern - then collapsed to $15,306/MW/year in February as calm weather met a larger fleet. The structural direction is clear even if the month-to-month swings obscure it.
The two-hour duration is the right call for this market. Two-hour batteries have out-earned one-hour systems in every month for two years in ERCOT, by margins ranging from 15% to 81%, with the gap widest during cold-weather scarcity events. The advantage is structural: longer duration captures multi-hour price spreads that a one-hour system simply cannot reach. Old 300 Storage's 2-hour configuration puts it in the right tier - but it's entering a fleet where 97% of ERCOT's modeled 2026 storage capacity consists of one-hour and two-hour systems, meaning it has no duration premium over most of its competition.
ERCOT's new Dispatchable Reliability Reserve Service (DRRS), introduced in 2026, compensates resources capable of delivering four hours of sustained energy during grid emergencies. Old 300 Storage's two-hour configuration does not qualify — a structural limitation worth watching as the market evolves toward longer durations.
The revenue environment is also being reshaped by ERCOT's Real-Time Co-optimization with Batteries (RTC+B), which went live in December 2025. The mechanism co-optimizes energy and ancillary services every five minutes using each battery's state of charge. In practice, it reworked the mechanics for a relatively small slice of ancillary revenue; batteries still earn the majority of their money from energy arbitrage, which RTC+B left largely unchanged. The operational consequence is that optimizer quality - how well the dispatch algorithm reads day-ahead versus real-time spreads - is becoming the primary differentiator between assets with identical hardware.
Where This Fits in Ørsted's Storage Arc
Ørsted deployed its first standalone BESS - a 20MW system in the UK - in 2019, followed by a 40MW system in 2021. Old 300 Storage is a different order of magnitude. The project adds to a 6 GW US onshore portfolio and signals that Ørsted's standalone storage ambitions in North America are real, not decorative.
The company is also building a 300MW/600MWh BESS co-located with the Hornsea 3 offshore wind substation in Norfolk, UK - the Boudica Project - expected online by end of 2026. That system shares a grid connection with an offshore wind farm, a structurally different configuration from Old 300's merchant-only dispatch. Ørsted has also been developing a 1 GW BESS pipeline in Midwestern US states through a partnership with Mission Clean Energy, with grid connection applications filed in MISO's Central and North regions.
The pattern is consistent: Ørsted is building storage as a standalone revenue asset, not just as a hedge for its wind and solar generation. Old 300 Storage's independent operation from the adjacent solar farm is the clearest expression of that approach.
The Honest Assessment
The hardware is solid. Tesla Megapacks are a known quantity - manufactured domestically, with integrated inverters and thermal management, and a commissioning process that Ørsted has now run through at multiple sites. The grid connection is live. The project is real.
The harder question is the revenue case. A two-hour merchant BESS entering ERCOT in August 2026 faces compressed spreads, a 16+ GW fleet that is still growing, and a duration landscape that is slowly shifting toward four hours for the highest-value ancillary products. Old 300 Storage will earn money - the arbitrage opportunity in ERCOT is not gone, and scarcity events like Winter Storm Fern demonstrate that the upside tail remains fat. But the base case is tighter than it would have been two years ago, and the optimizer running this asset will matter as much as the hardware underneath it.
At $135 million for 500 MWh, Ørsted has not overpaid for the option. The question is how well it executes on the dispatch side - and whether the ERCOT market gives it enough volatility to justify the bet before the four-hour wave arrives in earnest.
What is the Old 300 Storage project?
Old 300 Storage is a 250MW/500MWh battery energy storage system (BESS) developed by Ørsted in Needville, Fort Bend County, Texas. It reached commercial operations on August 5, 2026, and is fully integrated into the ERCOT grid. The system uses Tesla Megapacks manufactured in Lathrop, California.
Is Old 300 Storage connected to the Old 300 Solar project?
The two projects are co-located on the same site but operated independently. Old 300 Solar is a 430MW solar farm with a Microsoft PPA; Old 300 Storage dispatches separately against ERCOT's wholesale and ancillary services markets.
What is the duration of Old 300 Storage, and why does it matter?
Old 300 Storage is a two-hour duration system — it can deliver 250 MW continuously for two hours. In ERCOT, two-hour batteries have consistently out-earned one-hour systems, but the market is beginning to reward four-hour assets through new products like the Dispatchable Reliability Reserve Service (DRRS).
How much did Old 300 Storage cost to build?
According to a tax abatement agreement with Fort Bend County, Ørsted expected the project to cost no more than US$135 million — approximately $270/kWh of installed capacity.
How does ERCOT's battery revenue environment look in 2026?
Revenues are volatile and compressing on average. Day-Ahead top-bottom spreads fell roughly 50% year-on-year by June 2026 as the fleet grew past 16 GW. However, scarcity events — like Winter Storm Fern in January 2026 — still produce sharp revenue spikes, and two-hour systems retain a structural advantage over one-hour assets.
