ERCOT & Tesla: How Virtual Power Plants Can Help Texas Electricity Grid & Save Lives

Tesla held a virtual power plant (VPP) workshop for the Electric Reliability Council of Texas (ERCOT) on May 31. Gail Alfar, the writer at What’s Up Tesla?, attended and shared her thoughts. Also in May, Tesla made a request for Powerwall owners in Texas to opt into the Tesla ERCOT Demonstration to show the utility exactly how well VPPs work.

Gail noted that the workshop was hosted by ERCOT and led by leaders at Tesla Energy, including Arushi Sharma Frank, US Energy Markets Policy Lead at Tesla. Tesla designed a demonstration test and 64 Tesla Powerwall battery owners participated. They will provide energy as an aggregate and the demonstration showed impressive performance, Gail noted. The demo proved that there were no technical blocks preventing the owners from providing power to the Texas grid.

Gail not only attended the workshop, but she was also invited to speak and share her thoughts from the perspective of a registered nurse. She mentioned that many families were deeply affected by the severe power outage in February 2021 and that since Tesla has already demonstrated that it can provide reliable power through VPPs, there isn’t a reason for any delay in allowing full participation as soon as possible.

“As a healthcare provider, I advocate for people in need. Having power is important to people’s health.”

The VPP Workshop

If you didn’t attend the workshop, you can still view Tesla’s presentation here. Tesla explained the policy motivators as well as how customers provided services and solved problems for the grid.

“Texas has thousands of Megawatts of assets on the distribution system, trending the acceleration in distributed energy resources (DERs) (behind-the-meter generation and storage)

“FERC’s ‘Order 2222’ does not apply in Texas — but Texas regulators recognize the need to mobilize this capacity.”

The core problem, Tesla pointed out, is that Texas needs all available, affordable, dispatchable electric capacity/resources mobilized to address grid reliability challenges. Distributed energy resources are critical here. However, these are considered unrealized dispatchable assets to ERCOT.

The short-term solution is to make minor changes to an already existing and unutilized ERCOT market design concept that was developed 9 years ago. Tesla noted that this could immediately unlock grid reliability services from small distributed energy resources dispatched as an aggregation.

Graph courtesy of Tesla

The VPP Demo

Tesla noted that this was its direct effort with ERCOT to make additional grid services available and that the aggregation of around 60 customers was in a single ERCOT load zone. This was made possible by Tesla’s aggregation-building features as well as its ancillary services capabilities used in other markets. It was also made possible by collaboration with ERCOT staff to set parameters for VPP performance specific to ERCOT operations and dispatch rules as well as Tesla’s experience with delivering grid services in other markets.

The results showed that there were zero technical blockers.

Tesla ERCOT VPP workshop

Graph courtesy of Tesla

Tesla plans to file the results of the VPP demo with the Texas Public Utility Commission (PUC). In April, Will McAdams, Texas’ PUC commissioner, stated in a memo:

“Our office has taken up what the most important issues, considerations, and policy parameters were to be considered on the topic of distributed generation, on distributed energy resources. I call it the holy grail issue. If we can crack the code on that then the grid has unlimited potential, in terms of segmentation, in terms of resiliency capability, in terms of resource adequacy. All the other grids are tackling this as well, FERC is keenly interested in it.”

Tesla is willing and able to help Texas crack that code. Tesla provided a long-term solution as well as consideration for those approaches.

Long-Term Solutions

Graph courtesy of Tesla

Tesla noted that grid operators have been working towards mobilizing distributed energy resource (DER) capacity for a few years and have a model for sizing the congestion zones, or in other words, limiting aggregations at a congested transmission node. However, Texas hasn’t yet worked on a solution for large DER aggregations. Texas will need to find a creative solution that aligns with nodal dispatch if it wants to grow this market. Tesla emphasized that large-scale DER penetration will allow ERCOT to shift demand from interval to interval similar to how they shift supply today.

Final Thoughts on Texas and Tesla’s Virtual Power Plant Capability

I lived in Texas before, and it can get really hot there — even hotter than in South Louisiana. Some parts of Texas have similar humidity levels. Texas and its residents need to have a reliable grid in order to survive this heat and humidity. I think Tesla will prove to be a great ally for the state, ERCOT, utility companies, and the people, especially during times of intense heat or other extreme weather events.

I asked Gail if she had anything else she would like to add and she spoke of her experiences as a nurse and witnessing how people are affected by the loss of power when it happens.

“As a Texas resident and registered nurse in the state, I directly see people who are affected when they lose power. Whether it’s extreme heat or severe cold, people’s lives and health are at risk. Tesla is offering a utility in the form of a virtual power plant, or VPP, to ERCOT.

“Tesla already tested this virtual power plant using 62 customers and the system worked flawlessly, responding quickly to power needs. This short-term solution will be the start of something wonderful for Texans. I look forward to the Texas grid getting stronger when ERCOT allows Tesla to participate.”

She’s correct to mention that lives are at risk when the power goes out — especially if it’s out for long periods of time. During Hurricane Ida, the inside temperature of my apartment got to 140 degrees and my two cats almost died. I was very grateful and relieved when the power finally came back.

We often take electricity for granted, and I think what Tesla is trying to do in Texas is important and could set an example for other states, including Louisiana.

Click here to read Gail’s full article.


 


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