Texas likes to pride itself on a well-functioning electricity market. Residential prices have dipped below the national average. Customer complaints have fallen from previous years.
But when it comes to one area in particular — “distributed energy” — some experts believe Texas is falling behind. Distributed Energy, or DE, is defined as energy generated on the customer’s side of the electric meter. Think, for example, of electricity coming from small-scale diesel generators that otherwise provide backup power for large buildings. Rooftop solar panels also can provide distributed energy.
ERCOT, the organization that operates the state’s primary power grid, has begun considering ways to improve the use of distributed energy generation in Texas. ERCOT also wants to know how such generation can be incorporated into the complex, computerized system that it manages.
A recently released draft paper on Distributed Energy Resources could foreshadow the creation of new rules at the organization, also known as the Electric Reliability Council of Texas. The draft was released earlier this month. You can read it here.
While distributed energy generation can be used solely as backup power, its potential is broader and many owners of distributed energy generators envision a day when they can offer their power into the wholesale electricity spot market just like power from more traditional generation plants.
But this form of generation has been difficult for ERCOT to contend with, and some critics say Texas lags behind other states in developing programs that would allow customers to benefit from small-scale generators at their homes or businesses.
One of the key obstacles is that ERCOT actually knows very little of what occurs behind the customer’s meter. To address this problem, the white paper recommends collecting more detailed distributed energy data from Transmission & Distribution Service Providers and mapping all distributed energy generation sites to ERCOT’s model of the transmission grid.
According to ERCOT, this data will eventually be necessary to support effective reliability studies. Additionally, the paper recommends that ERCOT publicly post more detailed non-confidential distributed energy resource data, which would help operators, planners, and other market participants in making informed decisions.
Whether the paper will result in additional distributed energy rules remains to be seen. Again, you can read the paper yourself, at this link. But be warned. It’s dense.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.