Sunny Ray sits down with William Taggard of Cavern Energy Storage to ask why long-duration energy storage is not being built in Texas. Taggard, a 32-year engineer who left a large oil and gas project after COVID, explains his plan to combine pump storage hydroelectric with underground salt dome caverns along the Gulf Coast. He argues the technology is proven but the ERCOT market is the obstacle, because storage is paid through price volatility and more storage shrinks that volatility. He cites battery arbitrage revenue falling from about $94,000 per megawatt hour in 2023 to under $30,000 this year. Taggard proposes a one dollar per megawatt hour fee on wind and solar to fund payments to storage providers. He compares round-trip efficiency across lithium ion, compressed air, and iron-based batteries, and describes a first demonstration unit of one to two megawatts using existing caverns, followed by a five megawatt, 20 hour build. He also discusses natural gas tightness and his book, Fixing America.
Texas has the salt domes and the technology for long-duration storage, but its market pays for volatility that storage itself destroys.
What problem is Cavern Energy Storage solving?
We are solving long-duration energy storage. Adding wind and solar adds volatility to the grid, and storage is the answer. Pump storage hydro is about 85 to 90 percent of worldwide storage, but the US has built none since the 70s and 80s because the upfront capital cost is high and the projects are hard to build.
Why use salt domes instead of mountains for pump storage?
Texas, Louisiana, and Mississippi are flat, so I needed another way to do pump storage. Salt domes are miles wide and miles tall, and we have been drilling caverns in them since the 1940s. Instead of two lakes on a mountain, you have two caverns at different elevations. It combines two well-understood technologies.
Why is the market the real obstacle in Texas?
ERCOT treats storage like a regular power plant and pays it for arbitrage, buying cheap and selling high. But adding storage smooths prices and shrinks that spread. A one megawatt hour battery made about $94,000 in 2023 and under $30,000 this year. That hits batteries and hits long-duration storage even harder.
How would you change the market?
I would charge wind and solar a dollar per megawatt hour they add to the grid, paid into a fund. That fund pays storage providers a steady fee on top of volatility revenue. Wind and solar create the volatility, and storage removes it, so the people creating the problem help pay for the fix.
How does your efficiency compare with other storage technologies?
Lithium ion starts around 92 to 93 percent but degrades with use. Pump storage hydro is about 80 percent and stays constant, and we have a patent on how we reach and maintain that. Compressed air is 50 to 60 percent, and the iron-based batteries are around 40 percent. Our equipment is also all off the shelf.
What is the hardest engineering problem left?
Honestly, the engineering is not that hard. We need metallurgical studies because we run saturated salt brine through the equipment, and we need to confirm efficiency with a demonstration unit. The real hurdle is economics and the market. We can recover construction costs by selling the salt we remove.
What does the first project look like?
We will use two existing side-by-side salt caverns for a one to two megawatt demonstration unit, probably at 70 to 75 percent efficiency. Then we would build two purpose-made caverns for a five megawatt unit with 20 hours of storage. That covers 12 hours of daily use plus eight hours in reserve.
Why are you worried about natural gas?
Natural gas plants currently absorb most of the volatility from wind and solar. But gas is getting tighter from LNG exports, power plants, and data centers. We had a shortage in 1974 that shut down plants and factories. If gas tightens again, it becomes harder to be the swing fuel, and we will need more long-duration storage.
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