ERCOT new-node insights: a trading opportunity

As US power demand rises, grid operators are scrambling to connect sufficient capacity to cope. With new resource being commissioned all the time, understanding how new nodes behave during the process of interconnection and final operational approval can unlock unique trading opportunities. 

In our autumn 2025 outlook webinar for ERCOT, we launched our new Nodal Price Forecast feature and took a deep dive into the interconnection queue to explain how Wood Mackenzie’s unique node-level data can give power traders an edge. Complete the form to download a free copy of the presentation from the event, or read on for an insight into new-node behaviour and what it means for market prices.   

Understanding the interconnection process 

Like all independent system operators (ISOs), ERCOT puts new resources through three stages in the process of being connected to the grid: first energisation, then synchronisation, and finally operational approval. Once units are energised, synchronisation usually only takes a few weeks; units then begin testing and finally receive commercial approval.  

How the interconnection timeline varies 

Our analysis shows that the bulk of units that have begun the interconnection process since 2023 are either solar generation or battery storage facilities. Batteries are generally approved faster than other fuel types, with lower capacity units tending to gain approval more quickly than larger ones. The whole process can take up to 500 days for battery resources, and as long as 800 days for solar. 

The duration of the different stages within the process also varies between resource types (see chart below), with energisation actually being quicker for solar, on average. Meanwhile, wind farms and gas power plants took significantly longer than batteries to become energised. Approval times for commercial operation varied depending on the testing regime, with batteries tending to be quickest to get the go ahead. 

Understanding generator status 

As part of each new unit’s operating plan, a generating status is submitted — these status indicators are as follows: 

• OUT: A unit has been synchronised but is not generating electricity yet 

• ONTEST: Either a) a unit has passed some ERCOT checklists and is operating without automatic control for curtailment, or b) the unit is responsive to automatic controls for curtailment from the ISO, but the generator is fulfilling specific test criteria for a limited number of hours 

• ON: The unit has been approved for over 20 million volt-amperes (MVA) of power and is capable of following security constrained economic despatch (SCED) base points (these are dispatch instructions based on a mathematical model designed to generate and despatch power in the most economical way while considering key system operation constraints)  

Variations in generation behaviour during testing 

While there are three stages to the interconnection process and three labels to indicate generating status during the interconnection process, these do not align directly with each other. For all units studied, generation began after synchronisation, as would be expected. However, the exact timing of first generation varied significantly, as did the amount of power generated by units labelled as ‘ONTEST’ immediately after synchronisation.  

Generally, solar tended to move quickly to generating at maximum capacity more consistently, while batteries tended to discharge limited amounts of power during the testing period. Finally, while some units were labelled as ‘ON’ even before the official commercial operation date, others remained labelled as ‘ONTEST’ right up to the designated day. 

Impacts to the grid 

Testing power generation, particularly from a newly connected generating source, can contribute to local grid congestion even before it is officially in operation. For example, the new Poteet BESS (battery energy storage system) was flagged as being model-ready on 5 March 2025 (at which point the generator was given a price node). On 20 March, a constraint was in evidence on the Pearsall Switch to Poteet Sub section with Poteet on the sync list in real-time congestion. However, the unit wasn’t actually energised until 7 May.  

Implications for trading 

Unit nodes receive their first market price from around two days to as much as two months before even energisation takes place. This means that informed market participants can trade around new resource nodes throughout the interconnection process.  

By identifying new nodes in the early stages of interconnection (when they are recently model-ready or close to becoming energised), traders can take advantage as they begin getting picked up in congestion and are priced into the market.  

Wood Mackenzie’s new Nodal Price Forecast provides in-depth, real-time intelligence on over 900 nodes in the ERCOT region that captures both typical and atypical market dynamics. By combining unmatched granularity from our proprietary sensor network with historical market analysis and expert-driven forecasts, it gives users a real-time edge in power trading. 

Learn more 

Remember to fill out the form at the top of the page to access the slide deck from our ERCOT webinar. As well as covering this special topic and providing an introduction to our new Nodal Price Forecast solution, the presentation contains a Summer 2025 recap, along with weather and demand outlooks and congestion and pricing expectations for autumn generation.