Bid Timing and Market Efficiency in the Energy Transition.

Utility-scale batteries play an increasingly active role in electricity markets by arbitraging energy across time, yet their efficiency depends critically on market design. This paper studies a prevalent feature of real-time electricity auctions: bid lead time, which requires batteries to commit bids in advance of dispatch. Using comprehensive 15-minute bidding and settlement data for all utility-scale batteries in ERCOT from 2018–2025, we document active dynamic bidding, rapid responses to price shocks, and the importance of recent price information for forecasting. We develop an equilibrium model of electricity markets with dynamic battery bidding and show that longer bid lead times substantially reduce operational efficiency and profits, and dampen complementarity between batteries and renewable energy. Allowing bids to depend on state of charge significantly mitigates these losses. Our results highlight bid lead time as a key determinant of battery performance and market outcomes.