Texas launches two new virtual power plants to enhance the grid

Two virtual power plants are now up and running in Texas, providing additional power to the state’s electric grid, aggregated from consumers’ small energy devices.

It is part of the Aggregate Distributed Energy Resource (ADER) pilot project the Public Utility Commission of Texas (PUCT) directed the Electric Reliability Council of Texas (ERCOT), which runs the grid, to develop.

The initiative involves consumer-owned, small energy devices, such as battery energy storage systems, backup generators, and controllable Electric Vehicle (EV) chargers, being virtually aggregated and used as a resource in the wholesale electricity market.

“Small energy resources found in homes and businesses across Texas have incredible potential to continue improving grid reliability and resiliency by selling the excess power they generate to the ERCOT system,” PUCT Commissioner Will McAdams said. “It’s a win-win for Texas. Home and business owners get paid for power they supply and consumers in ERCOT get more reliability.”

Currently, there are 2.3 gigawatts (GW) of these small – less than 1 MW each – resources across the state, with 300 megawatts (MW) added just in 2023 alone. An ADER represents the aggregation of devices that are located at multiple sites as a single resource. The ADER coordinates the operation of individual devices to collectively reduce demand or feed power to the grid. Through an automated process, the ADER allows participating customers to sell their surplus power to the grid when called upon or reduce use.

“This ADER pilot project is an example of the electric industry, PUCT and ERCOT developing a pilot to solve issues rather than just studying them. The collaboration achieved the clear goals outlined by the Commission and is a model for future projects at the PUCT,” PUCT Commissioner Jimmy Glotfelty said. “We have a market in ERCOT that allows us to innovate and learn through realtime experimentation with real-world impact.”

ADERs are formed and operated by retail electric providers or utilities that sell electricity to homes and businesses. For this pilot project, compensation terms and participation requirements will vary depending on the provider operating the ADER. To qualify for participation in the pilot project, an ADER must be able to produce at least 100 kilowatts.

“As generation and distribution technology continues to improve, we expect to see more Texans taking advantage of these small energy resources in the future,” ERCOT President and CEO Pablo Vegas said. “This pilot project is an opportunity for us, the electric industry, and participants to learn how to harness these resources to support reliability in the ERCOT market.”

The two ADERs announced today involve Tesla Electric customers who have Powerwall storage systems in their homes and have agreed to sell their surplus power in the ERCOT market. One ADER aggregates Houston-area CenterPoint Energy customers and the other aggregates Dallas-area customers served by Oncor Electric Delivery Company.

Participation in the PUCT’s pilot project is voluntary. There are currently eight ADERs totaling 7.2 MW in the pilot project. Six have completed the initial registration steps and are in the commissioning process. Two of the eight have completed the required testing and are qualified to participate.