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On the Horizon: Streamlined Regulation for Small-Scale Solar

On the Horizon: Streamlined Regulation for Small-Scale Solar

Dec 18, 2024 | Txses Impact

by Elle Nicholson

TXSES is working on a new regulatory development that should improve the solar installation process for homeowners and smaller companies in Texas, if implemented. As distributed energy has increased in popularity throughout the state, the Public Utility Commission of Texas’ (PUC) rules for connecting distributed energy resources (DER)—small-scale energy sources like solar panels and battery storage—to the grid have not kept up. Current regulations were created years ago and meant mostly for large-scale solar installations. Their requirements often hinder the interconnection process for smaller-scale solar and make interconnection needlessly difficult, holding small- and large-scale DER to the same regulatory requirements despite operating at very different levels. TXSES is working to develop language for the PUC for two new rulings intended to streamline the interconnection process for small-scale solar by distinguishing them from large-scale systems.

The new rules, intended to be implemented in 2025, are designed to save customers time and money. One will specifically address installations of 50kW and smaller (residential) and the other will target installations 50kW-2500kW (small to mid-size commercial). These should simplify the process for homeowners and small to mid-size businesses. The rulings will also cover community solar projects of these sizes and include residential-scale battery storage for the first time. By omitting unnecessary requirements and speeding up interconnection of small-scale DER, the rulings are expected to save customers money and allow them to begin reaping the benefits of distributed energy sooner.

Examination of the existing regulation, substantive rules 25.211 and 25.212, reveals why such a solution is beneficial. The rules apply broadly to any installation under 10MW connecting to the distribution grid. As of now, if application of a specific requirement seems inappropriate for a proposed DER system, customers only have two options. They or their installer can either agree with their utility on different requirements or petition the PUC for a good cause exception. Both options are complicated and time-consuming, meaning smaller customers often end up complying with unnecessary measures.

Examples of such measures include pre-interconnection studies, required communications, protective equipment, and approval timelines. In the status quo, utilities can mandate pre-interconnection studies for all customers – fees are prohibited for small-scale DER, but the study itself is not. The study can take up to four weeks, slowing down proceedings and costing utilities and customers alike more money. Additionally, customers must provide the utility with “detailed information” concerning proposed systems. Rule 25.211 specifies such communications are subject to PUC rules 25.84, 25.272, and 25.273, none of which directly correlate to DER. This muddles communications and further convolutes the interconnection process.

Furthermore, rule 25.212 requires all DER to include protective equipment to prevent tripping of utility system breakers. Small-scale distributed resources produce too low wattage to trip high-voltage utility breakers, so this measure is excessive and adds unneeded costs. Finally, the stipulated timeframe for interconnection is four to six weeks from a utility’s receipt of a completed application and two weeks’ notice for startup testing. Enforcing the same timeline for a simple residential system as a large commercial system is illogical. These examples demonstrate why holding small DER to the same requirements as large DER creates unnecessary hurdles which lengthen and complicate the interconnection process. TXSES anticipates that its collaboration with the PUC to create separate rulings will correct these problems, thereby making interconnection faster and cheaper for small-scale DER customers.

The Explosive Energy Demand from AI, Data Centers & Crypto on Texas’ Grid

The Explosive Energy Demand from AI, Data Centers & Crypto on Texas’ Grid

Oct 17, 2024 | Txses Impact

By Elle Nicholson

Data centers are on the rise in Texas due to a variety of technologies. The foundations of the internet run on data centers, as do artificial intelligence (AI) and cryptocurrency mines, all of which are booming. Since data centers require copious amounts of energy for operation, they are drastically increasing levels of energy consumption for the state. Electric Reliability Council of Texas (ERCOT) CEO Pablo Vegas expressed concerns about this in a June testimony for the Texas Senate Committee on Business and Commerce, saying data centers could be responsible for about half of the added growth projected for Texas by 2030.

Texas is currently home to 342 data centers which together constantly require 7.597 gigawatts of power. For comparison, ERCOT’s 2024 energy load forecast estimates peak summer grid load at 86 gigawatts. This means as of 2024, data centers are consuming at minimum 8.8% of the state’s power—and this percentage is only going to grow in subsequent years.

On October 1st, the Texas Senate Committee on Business and Commerce met to hear invited testimony on the topic of “Managing Texas Sized Growth.” Vegas was the representative for ERCOT and presented a graph of ERCOT’s Contract and Officer Letter Growth Breakdown for 2024–2030. The graph showed summer peak load skyrocketing from the current 86 gigawatts to 148 gigawatts in 2030, and while exact figures were not given, data centers and cryptocurrency mines appeared to comprise roughly half of this growth.

The increase the ERCOT graph predicts for peak demand load could have worrying implications for the grid if growth is not carefully managed. The chief development officer for Skybox Data Centers, a corporation owning 1 gigawatt worth of data centers in Texas, recognized the need for data center alignment with the grid during his testimony in the October 1st committee hearing. He stated that Skybox is working closely with utilities to preserve this alignment.

Data centers and grid operators alike have been searching for ways to manage such growth. One potential solution is offsetting energy costs by financing new renewable sources. Data center operators tend to do this through behind-the-meter power purchase agreements (PPAs), where they sign agreements to source electricity from solar farms, wind plants, etc. in which they have invested instead of drawing it from the grid. For example, Amazon’s Solar Farm Texas Outpost is a 500-megawatt project financed by the tech giant that will supply renewable power to their data centers. This arrangement provides reliable power at a competitive cost without the hassle of owning the generation, all while adding necessary generation capacity to the grid.

Grid operators have also been exploring solutions to growth management. One possible answer lies within the data centers themselves. AI technology’s capability to perform demand forecasting means it can assist with load shifting, peak shaving, and anticipation of grid issues. Google has harnessed AI for these tasks and consequently saw the financial value of its wind power increase by 20%. Similarly, the Midcontinent Independent System Operator (MISO), which runs the Midwestern section of the U.S. grid, has been testing an AI model for potential integration into its system. The model optimizes grid operators’ daily planning, and MISO found that their calculations could be done 12 times faster with AI. In these ways, grid operators can maximize efficiency and cost-effectiveness to paradoxically reduce the capacity concerns data centers cause. Data centers will continue to grow explosively in Texas, so growth management methods such as these are likely to become increasingly relevant.

Photo credit: BalticServers.com, CC BY-SA 3.0, via Wikimedia Commons