Advanced Energy Perspectives

Roughly one-third of Americans report having a side hustle to supplement their income. Side hustles range from delivery drivers to social media influencers and may soon include something surprising—electricity providers. That’s the promise of a Virtual Power Plant (VPP), letting consumers sell their unused energy back to the grid and get compensated for it. A VPP is formed when distributed energy resources – like solar panels, batteries, and EVs – are combined, or “aggregated” together and managed as a single resource like a power plant. 

The Public Utility Commission of Texas (PUCT) began this year by engaging stakeholders on energy efficiency. The pace was ambitious, but now progress has stalled. Through the Energy Efficiency Implementation Project (EEIP), stakeholders participated in biweekly working groups that ran from January through March culminating in a number of recommendations and best practices for the Commission. But the trail has since run cold; Now as ERCOT, Texas’ primary grid operator, issues rapid-fire notices asking Texans to voluntarily reduce their electricity use to avert a grid emergency, we are left to wonder when the Commission will take up the EEIP’s recommendations and unlock Texas’ full energy efficiency potential. 

Texas’ demand for electricity breaks records year after year as the state battles extreme weather. Although Texas accounts for about 1/7th of the nation’s total energy consumption and uses more energy than any other state, demand for electricity keeps rising. Unlike traditional power plants that require years to become operational, distributed energy resources (DERs) are a readily available tool that Texas can use to meet this significant electricity demand.

The 88th Texas Legislative Session featured a clash of two forces struggling to influence the future of Texas energy—one side looking to reverse the Texas energy miracle, characterized by rapid development of large-scale wind and solar power generation, and the other side staunchly defending the competitive market, a hallmark of the state's energy system.  

In Texas, regulators and stakeholders are paving the way to a cleaner, more reliable future with a pilot project that puts flexible energy resources at the forefront of the state’s grid planning efforts. Following a months-long effort involving industry stakeholders and state regulators, the Electric Reliability Council of Texas (ERCOT) voted unanimously on November 3 to greenlight a pilot project that will allow residential participants to receive compensation for their contributions to the state’s electrical grid.