Virtual Power Plants, From Retail Electric Provider, Provide Power To ERCOT Grid For The First Time -- EnergyChoiceMatters.com

Virtual Power Plants, From Retail Electric Provider, Provide Power To ERCOT Grid For The First Time

August 23, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Texas PUC today announced that two virtual power plants (VPPs), both from Tesla's retail electric provider, are now qualified and able to provide dispatchable power to the Texas electric grid, which is operated by the Electric Reliability Council of Texas (ERCOT).

"This marks a first for the state’s electricity market and is part of the Aggregate Distributed Energy Resource (ADER) pilot project the Public Utility Commission of Texas (PUCT) directed ERCOT to begin developing in June 2022. The pilot project tests how consumer-owned, small energy devices, such as battery energy storage systems, backup generators, and controllable Electric Vehicle (EV) chargers, can be virtually aggregated and participate as a resource in the wholesale electricity market, strengthening grid reliability," the PUC said

The two ADERs announced today 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 Houston Electric 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.

EnergyChoiceMatters.com had reported on the imminent go-live for the Tesla VPPs last month

Through an automated process, the ADER responds to specific ERCOT instructions, allowing participating customers to sell their surplus power to the grid when called upon or reduce use.

ADERs are formed and operated by retail electric providers or utilities that sell electricity to homes and businesses. In this pilot project, compensation terms and participation requirements will vary depending on the provider operating the ADER. 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.

There are currently eight ADERs totaling 7.2 MW in the pilot project. Six have completed the initial registration steps and are in the commissioning process. Two of the eight (both represented by Tesla Electric) have completed required testing and are qualified to participate.

ADERs participating in the pilot project must include power generation devices, such as battery energy storage systems or generators, and may also include demand response devices like smart thermostats, controllable EV chargers and smart water heaters that can be controlled to reduce electricity use.

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.

"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. There are currently 2.3 GW of these small (less than 1 MW each) resources across the state, with 300 MW added so far in 2023 alone," the PUC said

Separately, PUCT Commissioners Will McAdams and Jimmy Glotfelty issued a memo on next steps for the ADER pilot

The Commissioners invited, for the Aug. 24 open meeting, a presentation from the ADER Task Force to provide an update on major milestones achieved, lessons learned, and hurdles that have been identified.

"We request the Task Force and ERCOT to begin creating a plan for the second year to address the policy principles laid out in the memo filed in Project No. 51603 on July 13, 2022, and the questions outlined in the governing document. We would like to understand what performance metrics would need to be met to unlock expansion of grid services or size caps," the Commissioners said

Project 53911

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