The Texas electric grid has witnessed a groundbreaking addition as two Tesla ‘virtual power plants’ (VPPs) have successfully qualified to supply power. This monumental achievement, a first in Texas, is a promising leap for the Electric Reliability Council of Texas (ERCOT), the entity overseeing the state’s electric grid.
The innovative feat is an outcome of the Aggregate Distributed Energy Resource (ADER) pilot project, initiated in June 2022 by the Public Utility Commission of Texas (PUCT). With this pilot, the PUCT aims to investigate the potential of consumer-owned energy devices, including battery storage systems, backup generators, and controllable Electric Vehicle (EV) chargers. The goal is to virtually amalgamate these devices to enhance the wholesale electricity market, thereby fortifying grid reliability.
PUCT Commissioner Will McAdams praised the initiative stating, “Harnessing small energy resources from homes and businesses across Texas not only amplifies grid reliability but also offers Texans an opportunity to earn by selling their excess power to ERCOT.”
Further emphasizing the significance of real-world experimentation, PUCT Commissioner Jimmy Glotfelty commented on the industry’s proactive approach, saying, “We have a unique ERCOT market that fosters innovation. This ADER pilot is an apt illustration of actionable solutions rather than mere theoretical studies.”
The increase in Texas residents investing in small energy resources is undeniable. Recent statistics reveal a staggering 2.3 GW of these resources, with 300 MW added in just 2023.
ADERs function as a collaborative force, orchestrating multiple devices to regulate power supply to the grid. The qualifying criteria for ADERs under the pilot demand a minimum production of 100 kW, ensuring each device does not exceed 1 MW. Currently, the ADER pilot project has set a cap at 80 MW to guarantee a safe introduction.
ERCOT’s President and CEO, Pablo Vegas, foresees an upward trend in the use of these resources. Highlighting the pilot project’s significance, he stated, “It paves the way for the electric industry to understand and capitalize on these resources, ensuring the ERCOT market’s robustness.”
The major announcement made this Wednesday spotlights Tesla electric customers. These customers, equipped with Tesla’s Powerwall storage systems, have opted to sell their surplus power in the ERCOT market. The two VPPs, one consolidating Houston’s CenterPoint Energy customers and the other comprising Dallas’ Oncor Electric Delivery Company customers, are pioneers in the ERCOT wholesale market as ADERs.
Drew Baglino, Tesla’s Senior Vice President of Powertrain & Energy Engineering, remarked on this landmark event, “This phase launch of the Tesla Virtual Power Plant establishes a pivotal moment for all Texans and the ERCOT grid, underlining Tesla’s commitment to fostering a decentralized energy ecosystem.”
The PUCT’s pilot project, being voluntary, welcomes any entity serving ERCOT’s electric customers to get informed and anticipate future participation. Presently, eight ADERs amounting to 7.2 MW are enrolled in the pilot, with Tesla Electric representing two that are qualified.
Established by PUCT Commissioners McAdams and Glotfelty, the ADER Pilot Project, supported by a 20-member task force, stands as a beacon of transparency, knowledge sharing, and stakeholder engagement. The pilot project will continually seek improvements until a definitive framework for ADER participation emerges or until the PUCT and ERCOT derive exhaustive insights.
