In Texas, companies are pioneering virtual power plant (VPP) initiatives by offering homeowners at-home battery systems through a subscription model that supplies power back to the Texas grid. Texas Advanced Energy Business Alliance's (TAEBA's) Matthew Boms spoke to San Antonio Express-News about the benefits of VPPs, encouraging the Texas government to invest in advanced energy technologies to increase grid reliability.
BANDERA — When the electricity went out in his neighborhood in early December, Tom Cook’s lights didn’t even flicker.
Four batteries tied into his rooftop solar system took over, keeping the lights and heat on at his house.
While the 8-minute outage certainly wasn’t a major emergency, it provided a test of the newly installed system.
It passed.
“Nothing was apparent at our house,” said Cook, 72. “The batteries just took over.”
The four batteries in his detached garage belong to Bandera Electric Cooperative. Rather than shelling out more than $20,000 to buy them himself, Cook pays the co-op a monthly subscription fee of $36.99.
Though Bandera Electric owns and controls the batteries, there is an important caveat. It promises the juice will be available to Cook when there are power outages or grid failures.
The rest of the time? They're part of a network of at-home batteries like Cook’s the cooperative is using to sell electricity for use across Texas.
Such pools of residential power are considered a “virtual power plant.” In a state facing unprecedented demand growth, the networks could be key in stabilizing the grid of the future.
But the Electric Reliability Council of Texas, which operates the statewide grid, has hurdles to clear to see such a mix of cutting-edge technology and energy efficiency widely adopted across the Lone Star state.
‘A unicorn’
Bandera Electric Cooperative, a rural utility delivering power to 40,000 customers, might not be the provider most expect to be this far ahead of the Texas energy game. But its in-house technology has put it in the same league as industry heavyweights.
“You’re talking to a unicorn,” said Bandera Electric Chief Administration Officer John Padalino. “It’s not typical for a co-op and it’s not even typical for a retail electric provider. We are peers with the very successful and sophisticated battery-EV company Tesla.”
Tesla Inc., the electric vehicle and battery company, and Bandera Electric are the only virtual power plants participating in a pilot program that the grid operator wants to grow.
ERCOT is considering doubling the target size of the pilot to 160 megawatts and adding regulatory tweaks to increase participation. As is, Bandera Electric in the Hill Country and Tesla networks in Houston and Dallas harness about 25.5 megawatts — well under the 80 megawatt goal set at the program’s start in 2022.
“The technology came faster than the policy,” Matthew Boms, executive director of the Texas Advanced Energy Business Alliance, said of the slow uptake. “The way the market works in Texas, and ERCOT specifically, does not necessarily encourage those long-term investments in virtual power plants.”
Boms was on the task force working through the pilot program — the Aggregate Distributed Energy Resource task force — to figure out how to clear hurdles to boost growth of the power pools and make Texas’ independent grid more resilient.
“The Texas government has got to come up with a way to incentivize it,” he said. “If we had these things set up already, we wouldn’t be talking about if the lights would stay on during a winter storm or a summer heat wave.”
Positive steps
The pilot was a first-of-its kind project. As lawmakers and regulators stare down power demand that could surpass 150 gigawatts by the end of the decade, their interest in virtual power plants is increasing.
The Public Utility Commission voted unanimously this month to shift oversight of the pilot program from the task force to ERCOT, a move that gives it more resources and input.
“Many were skeptical at the start, but committed pilot stakeholders and ERCOT folks pushed through to seek innovative solutions at every step of the way,” PUC Director of Energy Efficiency Ramya Ramaswamy told commissioners before the Feb. 13 vote. “The pilot can only benefit from the larger stakeholder group at ERCOT.”
Private industry has also been moving ahead with its own planning — another promising step, Boms said.
North American energy leader NRG announced late last year its own big plans. In partnership with virtual power plant company Renew Home, NRG will start using smart thermostats to create flexible loads of power beginning this spring in Houston.
By 2035, NRG and Renew say the program will also tap into at-home batteries and electric vehicles to create a planned 1-gigawatt power pool. That’s enough to power 200,000 homes.
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