But there’s some hot news in Texas: Big innovations to maintain grid reliability are underway.
The Electric Reliability Council of Texas (ERCOT) and the Public Utility Commission of Texas (PUCT) are launching a pilot program to test how aggregated distributed energy resources (ADERs) can bridge the gap between residential rooftop solar + battery systems and the larger wholesale market.
Texas’ DER Pilot Program will allow Texans with solar and battery solutions to contribute energy to the Texas grid during new bouts of extreme weather.
Commissioner Will McAdams said that the development of these resources will “put consumers in control of their energy future” and marks the next step in a series of new market rules that will make Texas a leader in leveraging customer assets, such as electric vehicle chargers, heat pumps, and HVAC systems.
This pilot is particularly significant for Texas, as it is the only state to limit connections with wholesale markets in bordering states. This setup comes at a cost during extreme weather events, since power outages cannot be alleviated by energy contributions from nearby states. Additionally, Texas has not designed specific policies to promote energy storage. For these reasons, as well as the state's reliance on a large fleet of peakers and its location in the epicenter of the country’s oil and gas industry, Texas is an ideal candidate for a pilot that promises to build upon multiple areas of the state's recent energy challenges.
The ability to leverage customer assets to promote increased energy distribution is an essential piece in creating a more sustainable and reliable energy system. For Texas, a technology-agnostic approach is ideal, as it would create a blueprint to meet the needs of prosumers, the grid, the economy and the environment. DERs are diverse, so the software systems that manage and control them must be flexible enough to integrate with the products of any vendor. A sustainable VPP market in Texas, across the U.S., and worldwide requires technology-agnostic solutions that support customer choice and scale.
Not only is ERCOT embracing aggregated DERs, but it is also putting customer resources in the same arena as traditional utility grid-scale resources. DERs’ market entrance fits into existing rules and operations with only minor adjustments. Compared to traditional power plants, megawatts from ADERs will have no preference or penalty. Many Texans argue that a benefit of an independent, isolated market like ERCOT, which operates solely under the authority of the Public Utility Commission of Texas, and not of the FERC, is this ability to move swiftly and accommodate technological changes that meet a market need.
In its initial testing phase, the ADER pilot aims to harness 80 megawatts (MW) of flexible resources on the ERCOT grid, which will pave the way for the rapid expansion of these types of energy sources in the coming years. Guidehouse Insights forecasts that more than 32 GW of DERs will come on-line in Texas during this decade alone. The entire Texas fleet of high-polluting peaker plants is approximately 30 gigawatts (GW). Based on Guidehouse’s data, if these DERs are intelligently aggregated into VPPs, the state of Texas can conceivably eliminate reliance on peakers in less than 10 years.
The world is moving towards a level of system reliability and cost savings that can be achieved year-round with VPPs. Consider this: AutoGrid's AI-driven VPPs resulted in over 1,000 peak demand events, launched from 1 million devices. During two events in Hong Kong, 600,000 households were asked to cut back their power usage, and the resulting savings reached 300,000 kWh, equivalent to eliminating 110 tonnes of carbon emissions.
News of this launch isn’t surprising, since many can vouch for the power of DERs in improving grid stability. It was only a matter of time until Texas began transforming its electrical grid into a distributed, decarbonized, and digitalized network of connected assets.
John Bonnin is a Senior Energy Consultant for AutoGrid. He has over 30 years of industry experience, including 18 years at CPS Energy as Vice President of Energy Supply and Market Operations. His focus was managing market risks to native load customers and optimal dispatch of CPS Energy’s power generation fleet, which included over 1.5 GW renewable energy and 200 MW Demand Response capability. Mr. Bonnin has a M.S. in Management/Computer Resource Management from Webster University and a B.S. in Chemistry from LSU.