Texas Mulls New Grid Markets for Aggregated Distributed Energy Resources
Texas, despite being one of the country’s largest and sunniest energy markets, has not seen a lot of growth of distributed solar power. Beyond low energy prices, one big reason is that the Texas deregulated energy market, which covers about three-fourths of the state, doesn’t allow for net metering rules like those in place in California, Hawaii and 41 other states, which dramatically improve the economics for owners and aggregators of rooftop PV.
But perhaps the state’s competitive market could be re-jiggered to give distributed solar — and all sorts of other customer-sited distributed energy resources (DERs) — a chance to earn more money, if they can be aggregated and located in places where it’s more costly to deliver grid power to end customers.
Over the past few months, Texas grid operator ERCOT has been quietly crafting a proposal that could set up just this kind of regime for distributed energy. The ideas in play include allowing aggregated DERs to earn a broad, averaged-out wholesale price for the energy they export to the grid, opening up access to payments based on the cost of wholesale power at specific points on the grid, or even creating opportunities to play in ERCOT’s lucrative energy and ancillary services markets.