A new report released last week by the American Council for an Energy Efficient Economy (ACEEE) outlines how better energy efficiency and a robust demand response program using distributed energy resources (DER) already on the grid could provide up to 11 GW of “flexible generation” to ERCOT, the Texas grid operator, when the grid is strained.
Readers will recall Winter Storm Uri, in which millions of Texans lost power during a cold snap in February 2021 due to a combination of disastrous events including freezing gas pipelines and gas-fired generation, lack of wind power, and sub-zero temps that forced Texans to turn up the heat in their homes. Grid operator ERCOT was forced to shut off power to millions of homes to keep the grid from going into a catastrophic failure and unfortunately, many people died as a result.
One answer to the problem facing ERCOT could be increasing the amount of generation capacity on the grid and requiring more weatherization to existing plants serving Texas. A set of new gas-fired power plants with an 11-GW capacity have been proposed by Starwood Energy at a cost of $8B.
While stakeholders await new rules and regulations expected to be released this week by the public utilities commission (PUC), ACEEE wants the commission to be aware of just how much could be gained by a combination of energy efficiency upgrades and the use of DER for demand response.
ACEEE modeled the potential impact of Texas’s electric utilities expanding their programs (and creating new programs) that incentivize homeowners to upgrade from electric furnaces to efficient heat pumps when existing systems need to be replaced, improve attic insulation and duct sealing, switch to smart thermostats, and install heat pump water heaters. ACEEE also considered three potential demand response programs, in which electric customers are provided an incentive to allow their utility to shift when their central air conditioners, water heaters, and electric vehicle chargers are used away from times of the highest stress on the power system.
The 7 programs, deployed aggressively under Public Utility Commission direction over 5 years (beginning in 2023), could offset about 7,650 MW of summer peak load and 11,400 MW of winter peak load, ACEEE found. This approximately equals the electricity that would be generated under 2 separate private proposals this year to build 10 or 11 new gas power plants that would be used at peak times.
Allison Silverstein, Secretary for ACEEE said in a press briefing that she considers the problem a matter personal responsibility. “In my household, if I overspend then people would demand I cut my expenses,” she explained, adding, “I expect that by extension that means reducing your demand instead of finding me more supply…It’s like me saying ‘give me more income.’”
Further, the cost of the energy efficiency upgrades coupled with demand response programs totals $4.9B, 39% less than the new gas-fired power plant proposals. And with energy efficiency upgrades, there are double benefits. Homeowners benefit from better insulated homes and businesses leading to lower energy costs overall and ERCOT benefits from reduced demand on the grid.
The report, Energy Efficiency and Demand Response: Tools to Address Texas’ Reliability Challenges, is available for download here.
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