Virtual power plants to provide power to ERCOT grid for the first time, PUCT says

Two virtual power plants are now qualified and able to provide power to the Texas electric grid, operated by the Electric Reliability Council of Texas (ERCOT), the Public Utility Commission of Texas said in a news release Wednesday.

AUSTIN (KXAN) -- Two virtual power plants are now qualified and able to provide power to the Texas electric grid, operated by the Electric Reliability Council of Texas (ERCOT), the Public Utility Commission of Texas said in a news release Wednesday.

This is a first for the state's electricity market, the release said. The pilot project tests how consumer-owned, small energy devices, like battery energy storage systems, backup generators, and controllable Electric Vehicle (EV) chargers, can act as a resource in the wholesale electricity market, strengthening grid reliability, according to PUCT.

“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,” said PUCT Commissioner Will McAdams. “It’s a win-win for Texas. Home and business owners get paid for power they supply and consumers in ERCOT get more reliability.”

Texans are increasingly investing in small energy resources, such as backup generators or solar panels connected to battery energy storage systems, for their homes and businesses, the release said.

“This [Aggregate Distributed Energy Resource (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,” said PUCT Commissioner Jimmy Glotfelty. “We have a market in ERCOT that allows us to innovate and learn through real-time experimentation with real-world impact.”

ADERs are formed and operated by retail electric providers or utilities that sell electricity to homes and businesses, according to PUCT. In this pilot project, compensation terms and participation requirements will vary depending on the provider operating the ADER, the release said. To qualify for the pilot project, an ADER must be able to produce at least 100 kW, and each individual device in the ADER must be less than 1 MW. The average residential battery is about 5 kW. The pilot project is currently capped at 80 MW of total participation to ensure a safe and controlled rollout, according to PUCT.

“As generation and distribution technology continues to improve, we expect to see more Texans taking advantage of these small energy resources in the future,” said ERCOT President and CEO Pablo Vegas. “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.”

According to PUCT, the two ADERs announced Wednesday 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 ADER aggregates Dallas-area customers served by Oncor Electric Delivery Company. These two VPPs are the first to participate in the ERCOT wholesale market as ADERs, the release said.

“Today’s launch of the first phase of the Tesla Virtual Power Plant is a milestone for Texas residents, Texas distribution utilities and the ERCOT grid,” said Tesla Senior Vice President of Powertrain & Energy Engineering Drew Baglino. “Our collective work has allowed Tesla to build a decentralized energy ecosystem that seamlessly integrates stored solar energy from Powerwalls onto the ERCOT grid.”

Participating in the PUCT’s pilot project is voluntary, and any entity that serves electric customers in ERCOT is encouraged to learn about the project and plan for future participation, according to PUCT.

The ADER Pilot Project and a 20-member task force were established by PUCT commissioners McAdams and Glotfelty, the release said. The task force assists the PUCT and ERCOT by ensuring public transparency, providing subject matter expertise and facilitating stakeholder collaboration with ERCOT. The Pilot Project will continue to collaboratively develop solutions until permanent rules are developed for ADER participation in the market or until the PUCT and ERCOT deem the lessons-learned from the pilot project are complete, according to PUCT.

Additional information and resources can be found on the PUCT website, the ADER Task Force YouTube and the ERCOT website, the release said.