B2U's 10 MW template moves fast, but the tolling counterparty is missing

Utility Dive reported on Sept. 15 that B2U has a second battery storage project in ERCOT, the Bexar Martinez installation, rated at roughly 10 megawatts and assembled from more than 700 battery packs that previously powered electric cars. It is the same size as the company's first Texas site, and the repetition is the plan: B2U says several more "Texas 10" projects are in development in ERCOT, with construction possible as soon as this year and grid services following in 2027.

The work here is regulatory. At that nameplate a project is eligible for faster energization under ERCOT's interconnection process for small generators. Rather than chase one large interconnection, B2U standardizes a small one and repeats it, which shifts the binding constraint onto module supply and site count.

The surrounding market gives that lane its value: ERCOT set a December deadline to audit its data-center interconnection requests and separate queued capacity from real demand, as PWD reported this month. As we have argued, connection rights now trade before electrons do, and what a small-generator lane buys is speed.

That supply has a counterparty: in June, B2U announced an agreement with Waymo to repurpose batteries from the autonomous mobility company's vehicles as they age out of its fleet, and Hall told Utility Dive the arrangement will deliver "hundreds of megawatts of storage capacity" over time, much of it connected to grids in communities Waymo serves. The geography may matter more than the volume: a robotaxi fleet carries an operating footprint, a mileage schedule and a retirement curve, which is what a developer repeating identical sites actually needs. That B2U's pipeline will track that fleet is an inference, though a short one given how Hall framed the agreement.

The timing evidence points both ways. Geotab's 2024 analysis of 11 EV models found average annual degradation of 1.8%, leaving about 91% usable capacity after five years, and Hall reads data of that kind as a tailwind: batteries holding up better in the field than lab tests predicted should accelerate EV adoption and, eventually, the flow of retired packs into stationary storage. The nearer-term reading runs the other way, since slower degradation means cars keep their batteries longer and retirement arrives later. Second-life storage runs on other people's wear-out schedules, and B2U is contracting supply against a curve that its own cited evidence says is flattening.

Scale is the other qualifier. Anurag Srivastava, an electrical engineering professor at West Virginia University, told IEEE Spectrum in July that second-life batteries account for less than 3% of deployed storage capacity and could reach 20% to 25% in the 2030s, contingent on continued improvement in battery health diagnostics. That is a share forecast with a long fuse, and the condition attached to it is the commercially relevant part: repurposed packs have to clear a health assessment credible enough for a tolling counterparty or a lender to price the capacity.

Hall said both ERCOT installations run on a merchant basis for now while B2U completes tolling agreements with third parties, and the coverage names no offtaker, term or price. Announced capacity without a counterparty is a familiar pattern across energy infrastructure—merchant risk parked on the developer's balance sheet—and B2U has filled in more of the picture than most, on one side of the ledger only. Typical projects come in with installed costs as much as 40% below competing BESS solutions with equivalent reliability and performance, Hall said, and they qualify for the domestic content bonus adder under Section 48(e) of the investment tax credit. The cost side carries a number and a tax-credit claim; the revenue side carries neither.

The disclosed pipeline exceeds 1,000 MWh across front-of-meter and behind-the-meter projects in ERCOT and other markets, and B2U said last week it expects to deploy more than 50 MWh in ERCOT over the next six months. Those are portfolio figures rather than a contracted book, and the Waymo agreement is sized in megawatts across an open horizon, so the numbers cannot be stacked into one total.

The uncomfortable part of the pitch is that tolling counterparties price what an asset saves them, so a developer booking a 40% construction discount should expect the negotiation to hand a slice of it back in the toll; the discount stays a cost position until a contract converts it into margin. How much survives is a countable question.

A third Texas 10 groundbreaking would show the template repeats. The next milestone is the first tolling agreement carrying a counterparty's name, a term and a price—the point at which a merchant fleet of repurposed packs becomes a contracted one, and the 40% becomes a number about returns rather than construction.