As ERCOT continues to strengthen grid stability in an increasingly inverter-dominated system, a new concept is emerging that could directly impact developers and operators across the market. ERCOT recently introduced a proposed Advanced Grid Support (AGS) Incentive Program aimed at accelerating the voluntary adoption of grid-supportive capabilities across inverter-based resources (IBRs).
The AGS initiative builds on recent reliability rulemakings and signals a broader shift in how ERCOT is approaching system strength, stability, and resilience as the generation mix continues to evolve.
Expanding on Recent Reliability Requirements
Recent updates, including NOGRR272 and PGRR121 (refer to EPE’s previous article here for more details), established requirements for certain Energy Storage Resources (ESRs) to provide advanced grid support capabilities for projects with Standard Generation Interconnection Agreements (SGIAs) executed on or after April 1, 2026.
The proposed AGS Incentive Program elaborates on this foundation by encouraging voluntary adoption of these capabilities across a broader set of resources. Notably, inverter-based resources such as wind and solar, which are not currently required to provide AGS, would be eligible to participate.
AGS Incentive Program Overview
ERCOT's proposal introduces a one-time financial incentive to support implementation of AGS capabilities. Key elements of the program as currently proposed include:
- Application and Evaluation: The application deadline is targeted for mid-2027. Projects must submit completed application forms, model demonstrations, and quality testing results. Applications will be evaluated based on order of receipt and project size (MW rating).
- Incentive Structure: The incentive is set at approximately $1,500 per MW, with total program funding capped at $25 million. Payment is adjusted based on operational availability, with full payment for resources achieving 90% or greater availability during the first year and reduced payments for lower availability levels.
- Implementation Timeline: AGS capabilities must be implemented and operational by the end of 2028.
- Cost Allocation: Program costs will be allocated across the total load on a Load Ratio Share (LRS) basis.
Why The AGS Incentive Program Matters for Developers
The AGS Incentive Program reflects ERCOT's recognition that future grid reliability will increasingly depend on the performance of inverter-based resources. By incentivizing voluntary adoption of advanced controls, ERCOT aims to mitigate system stability risks associated with high IBR penetration, reduce constraints that may limit future generation and load interconnections, and improve overall system response during disturbances.
For developers, participation in the AGS Incentive Program requires meeting defined modeling and performance criteria. Projects that qualify will need to demonstrate compliance with AGS capabilities through validated dynamic models and performance testing.
As ERCOT continues to formalize AGS expectations, accurate modeling and early engagement with the program requirements will be relevant to both interconnection timelines and ongoing operational compliance.
What ERCOT Developers can Expect Next
ERCOT plans to continue stakeholder engagement following the IBR Working Group (IBRWG) presentation, incorporate feedback, and formally submit the associated NPRR in Q2 2026. Further definition of eligibility criteria, technical requirements, and program administration is expected as the process advances.
As with many emerging ERCOT initiatives, the framework remains preliminary and subject to change as it moves through the stakeholder review and approval process. EPE is actively monitoring developments and will provide updates in future Watt's Current articles as the program is finalized.
How EPE Can Support You Through the AGS Incentive Program
Our team has already started incorporating the Inertia Response Test and the Loss of Synchronous Machine Test into our standard Model Quality Tests (MQTs). We have conducted multiple projects end-to-end, including completing MQT reports showing compliance.
Submitting several of these AGS MQTs early, coupled with our significant market exposure in ERCOT, has given us great visibility into where challenges exist, especially around model updates, OEM feedback, and the inputs ERCOT expects.
As ERCOT continues to evolve its reliability framework, early technical alignment will be key to capturing available incentives and avoiding future compliance challenges. If you are evaluating AGS implementation for your project portfolio, find out how our team may be able to support you by contacting us using the form below.
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