By Julian Spector
Texans can sign up to use solar-powered batteries and other energy devices to make money in the state’s power markets, under a pathbreaking new grid program.
So-called virtual power plants (VPPs) perform grid roles previously reserved for large-scale power plants, but they do it by aggregating hundreds or thousands of buildings with controllable energy equipment, like batteries charged by rooftop solar. VPPs often get mired in laborious regulatory proceedings before they ever become reality, but cleantech advocates in Texas worked with state regulators to push through a VPP pilot program last year with surprising speed.
State regulators approved the Aggregated Distributed Energy Resources (ADER) Pilot Program in October, and now the onboarding has begun. Households and businesses can sign up with participating electricity retailers if they live in parts of the state that feature competitive electricity providers, such as the areas around Houston or Dallas. They can also enroll with their municipal or cooperative utility if that entity chooses to participate.
The pilot allows up to 80 megawatts of capacity from assets in homes and businesses to bid into the state’s competitive wholesale markets, run by grid operator ERCOT. The devices have to be able to export power back to the grid, but they can’t be bigger than 1 megawatt. That means fossil-fueled generators technically could participate, but the key technology is likely to be solar-powered batteries, which can be programmed to respond automatically to market signals and don’t require paying for fuel to burn.
Companies looking to take advantage of the new program need to be licensed Texas electricity providers; they also need access to batteries or other controllable devices in customers’ homes or businesses. No one company is allowed to control more than 20 percent of the VPP capacity, but the overall program is expected to be expanded, pending positive performance.
So far, the entities jumping on the opportunity are forward-looking clean energy companies that helped design the policy.
Electric car-maker Tesla launched its own Texas retail electricity venture in December and is enrolling Powerwall battery customers in its virtual power plant. The company previously organized its own demonstration of 64 North Texas homes with Powerwalls to show state officials that these resources were technologically capable of providing value to the grid.
The U.S. branch of British clean energy retailer Octopus Energy is also looking for customers in partnership with Enphase, the solar-microinverter manufacturer that sells residential batteries. Octopus customers with an Enphase battery can knock $40 off their monthly power bill by letting Octopus use the battery for wholesale market activities, CEO Michael Lee told Canary Media.
A newer distributed-energy startup, David Energy, offers commercial electricity and recently launched residential retail service in Texas at a “friends and family” rate, said CEO James McGinniss. Over the next several months, David Energy will roll out features to control customer devices so they can participate in its VPP.
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