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. 

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.

In the winter of 2021, Texas experienced firsthand the dangers of an electric grid dependent on the seamless functioning of a small number of large, weather-vulnerable generation sources. The inability to meet the energy needs of over 70% of the state amid a winter weather crisis signals the system’s clear need for reform; so, too, the unseasonable heat waves that hit Texas this spring, which pushed grid power to its limits. With large traditional power plants taking at least six years to become operational, Texans need adaptive solutions that will meet their needs today. In the face of rapidly growing electricity demand, uncertain forecasting, and aging infrastructure, a new TAEBA report demonstrates the power of distributed energy resources as clean, low cost, and resilient tools poised to bring Texas into the 21^st century of electricity provision.

It was a dark and stormy session for the Texas legislature, dominated by electric power issues surfaced by Winter Storm Uri. With the Texas electricity system under more scrutiny – and more up for grabs – than at any time since restructuring in 1999, we at the Texas Advanced Energy Business Alliance (TAEBA) had our hands full. But when the dust settled and the legislature gaveled out on Memorial Day, the outcome for advanced energy was net positive – even though the legislature missed a golden opportunity to enhance grid resilience with distributed energy resources.