In many cases, developers are dispatching utility-scale energy storage in wholesale markets with the main purpose of making money. A battery charges when power prices are low, and discharges when they’re high, netting a profit for the company owning it or leasing it. But according to Jacob Mansfield, cofounder and CEO of energy portfolio management platform Tierra Climate, storage’s market potential is much broader.
“Batteries in the status quo are installed primarily to chase economic signals,” he told Latitude Media. “We’ve been looking at how you can use energy storage for a broader set of value propositions, including proactively decarbonizing.”
That’s the idea behind a pilot project Tierra Climate conducted in Texas last year. From October to December 2025, the company operated a 100-megawatt/200-megawatt-hour utility-scale storage system with the primary goal of reducing the grid’s carbon emissions.
Conducted on behalf of an undisclosed hyperscaler leasing the battery via a tolling agreement, the project “achieved as much as 1,444.2 [metric tons] of incremental avoided CO2” in 90 days, according to a recently published case study.
The result is a step toward developing a standardized methodology to quantify the emissions impact of storage, something that the Energy Storage Solutions Consortium, of which Tierra is a member, has been working on for years.
The effort is central to the ongoing industry debate over how corporate Scope 2 emissions rules should be rewritten. While companies like Google are advocating for 24/7 hourly matching, others like Microsoft and Amazon argue that corporations should be rewarded for actual avoided emissions instead.
Tierra’s pilot project provides the data on how to use storage to back up the latter approach and reward a company for charging a battery when there’s plenty of clean energy on the grid, and discharging it when the grid is at its dirtiest. While the idea had been explored in various contexts before, including in a 2025 white paper published by WattTime, Amazon, and RMI, Mansfield said the Tierra project is the first time it’s been tested with a real asset.
Measuring decarbonization
For Tierra, the main challenge of the project was finding a way to effectively measure the system’s impact. Unlike wind and solar, batteries do not inherently reduce emissions — and can even increase them in some cases.
“Batteries…are not 100% efficient, so for every 100 MW you put in a battery, you get 90 MW out, [because] they consume energy in the form of heat in the process of charging and discharging,” Mansfield said. “If you charge up with a lot of emissive energy and you consume energy, you can actually induce emissions.”
To avoid that, Tierra, which normally uses its AI-powered models to dispatch batteries for economic gains, created an additional predictive layer. Trained on historical marginal emissions data, the tool forecasts how dirty or clean the grid is at any given time, with an accuracy ranging from 80% to 90%. “That was a pretty big lift on our side, but now we have the ability to forecast emissions,” Mansfield said, adding that they then adjust the accuracy once the real marginal emissions rates are published.
Tierra then uses this additional forecasting layer to decide when to charge the battery, ideally when it’s both economical and there’s an abundance of clean energy on the grid.
“You want to be able to soak up all the clean energy that you can when it’s on the margin, which has the knock-on effect of enabling more renewables to come online and reduce curtailment,” Mansfield said. That also means deciding not to charge the battery when marginal emissions are predicted to be high.
In addition, the company simulates how the battery would have operated based on purely economic factors, without taking emissions into account, and develops a “counterfactual” to put a number on the estimated avoided carbon emissions. In the case of the pilot project, those amounted to nearly 1,500 metric tons over 90 days.
Opportunity cost
Granted, this work comes with what Mansfield calls “an opportunity cost.”
“Over the 90-day period, we sacrificed around $300,000,” he said, noting that this approach prioritized as much carbon abatement as possible. Theoretically, a company can also decide to have a lower carbon abatement goal and therefore a lower opportunity cost, he added.
In a future where the Scope 2 debate is settled in favor of the approach championed by Tierra, Amazon, and Microsoft, this opportunity cost would at least in part be offset by the value of their officially recognized avoided emissions.
And these avoided emissions could make batteries more attractive for corporate offtakers than they currently are — perhaps even upping their appeal in retail markets, where they cannot be used for wholesale arbitrage, but are used mostly to lower customers’ retail electricity bills or provide backup power instead.
“If you can build a value proposition case that batteries can do a lot of different things, like risk management, backup reliability, and sustainability, you can bring corporate offtake to batteries,” Mansfield said.
In the past, corporate offtake in the form of power purchase agreements has helped banks feel more comfortable financing wind and solar projects. That approach could make energy storage a more financeable asset class, something the sector is still struggling with because of its high costs and the relative novelty of its revenue model. And according to Mansfield, ““that could be a boon for batteries being developed and deployed.”
