Spearmint Energy has closed an equity investment with Kyuden International focused on two utility scale battery projects that are already operational, a notable development in ERCOT where rapid load growth and tightening reserve margins have typically seen financing precede lengthy construction timelines.
The transaction covers Tierra Seca and Seven Flags, each rated at 100 megawatts with two hour duration, adding a combined 400 megawatt hours of storage capacity to ERCOT. Both systems are located near Del Rio and Laredo, areas where transmission congestion and load growth have increasingly exposed the grid to price volatility. Rather than framing the projects as future optionality, Spearmint and Kyuden are tying capital to operating assets that entered service in late December 2025, positioning the investment squarely around near term grid services and revenue capture.
Battery storage has become a central balancing mechanism in ERCOT as thermal retirements continue and renewable penetration rises. According to ERCOT system data, batteries now provide a growing share of ancillary services such as frequency regulation and responsive reserve, functions that were historically dominated by gas fired units. Two hour systems like Tierra Seca and Seven Flags are not designed to replace long duration capacity, but they are increasingly valuable during evening ramps and short peak events when price spikes can be severe.
Kyuden International’s entry into U.S. battery storage is strategically significant given its background. The firm is the overseas arm of Kyuden Group, Japan’s largest electric utility, and its prior U.S. exposure focused on solar portfolios and gas turbine combined cycle plants. Moving into standalone battery equity reflects a broader shift among incumbent utilities toward storage as a core asset class rather than a grid accessory. Still, the investment does not signal a wholesale pivot away from thermal generation, as Kyuden continues to hold gas assets that provide longer duration reliability.
From Spearmint’s perspective, the deal adds to a capital stack that already exceeded $250 million in construction financing secured earlier in 2025 from Manulife, East West Bank, Investec, and Sugar Creek Capital. That level of financing underscores how ERCOT remains one of the few U.S. markets where merchant battery projects can reach financial close without long term capacity payments, relying instead on energy arbitrage, ancillary services, and congestion revenues. The tradeoff is exposure to price risk, particularly as battery penetration itself begins to compress volatility during certain hours.
The projects are being built by M.A. Mortenson using Sungrow’s PowerTitan 2.0 platform, a technology choice that reflects the growing role of Chinese inverter and battery system suppliers in U.S. storage deployments. While these platforms are widely used, their inclusion also places renewed focus on supply chain scrutiny and trade policy, especially as U.S. regulators weigh tariffs and domestic content requirements for energy infrastructure.
For ERCOT, the addition of 200 megawatts of dispatchable battery power does little on its own to resolve long term adequacy concerns, particularly during multi day heat waves. However, incremental deployments like Tierra Seca and Seven Flags contribute to a cumulative effect that has already changed real time operations, reducing reliance on emergency measures during short duration stress events. Whether that trend continues to scale fast enough remains an open question, especially as load growth continues to outpace most official forecasts.
