ERCOT Regional Planning Group’s announcement this month that ERCOT demand may double by 2030 (see ERCOT presentation slides).
It all comes down to a very simply concept — Supply and Demand.
When considering the problems ERCOT is having in trying to meet the growing demand for energy, it is time they took into consideration all possibilities. This includes not only demand, but all the options for supply.
Investors are developing solar power and storage at an unprecedented rate and the costs have dropped to the point that the technology is cheaper than coal as well as natural gas (see “Texas solar surpasses coal production for first time”). But intense demand could overwhelm all that new supply, and then some.
Demand hit 85 gigawatts last summer and ERCOT recently estimated that Texans would need 92 gigawatts of electricity to weather another Winter Storm Uri.
With an expected flood of demand from large loads, including data centers, electric vehicle fleets and much, much more coming online in Texas, demand will rise even higher and faster.
Without higher demand flexibility, the grid simply will not be able to keep up and Texans will face higher electricity bills and more blackouts.
If investor-owned utilities would take advantage of all the options available, including energy efficiency, demand response and incentivizing rooftop solar it would cost much less than new power plants needed to meet the demand that we will be facing. It would make the grid stronger and save Texans money.
If we try to keep up by just building enough infrastructure, and dispatchable generation from gas plants to simultaneously cover peak electricity needs without considering the exploding demand, the grid will be one of the most expensive and least reliable in the world.
The good news could come from distributed solar power. Distributed solar’s ability to increase customer resiliency and predictability against the expected rise in the cost of electricity, will be vital as the state moves forward. And if storage is added, that reliability will increase several fold.
In our ongoing commitment to strengthen Texas’s energy infrastructure, the Texas Solar Energy Society is proud to update our members on a crucial initiative. Spearheaded by our research team, we have embarked on a project to estimate the economic impact of grid service interruptions across the state due to the extreme weather events our state has been experiencing.
Last year, we projected that these interruptions could cost our state economy around $2 billion in 2023. However, we have refined our methods and adjusted our focus to 2022, in order to take advantage of the more comprehensive data available. This change allows us to provide a more accurate and actionable analysis as we advocate for necessary grid reforms.
The challenges of this analysis are manifold, particularly due to the diverse nature of Texas’ electricity providers. Our initial approach of using data from utility providers proved too complex due to their varied customer bases, ranging from noncompetitive municipal services to competitive retail providers. To overcome this, we shifted our focus to Transmission and Distribution Utilities (TDUs). These entities, regulated as natural monopolies, manage a unified network of electrical wires across Texas and are monitored by the Public Utility Commission of Texas (PUCT). This strategic pivot ensures our analysis covers the entire Texas grid, leveraging data from 68 recognized TDUs.
Another significant hurdle was choosing the right data sources to accurately capture the frequency and duration of power outages. The PUCT’s Annual Service Quality Reports provided some insights but were limited to private TDUs and lacked comprehensive customer data. Thus, we opted for the broader and more detailed EIA 861 dataset, which aligns with the standards set by the Institute of Electrical and Electronics Engineers for 2022. This decision has enhanced the reliability of our preliminary estimates.
To date, we have completed estimates for 24 out of the 68 TDUs, suggesting a potential cost of $68.6 billion in 2022 alone. We continue to seek IEEE-compliant data from other utilities and will update our findings accordingly.
The insights garnered from our detailed analysis not only quantify the financial impacts of grid interruptions but also illuminate the path forward for enhancing grid reliability. The Texas Solar Energy Society is committed to using this crucial data to advocate for comprehensive grid maintenance strategies that are not only responsive but also proactive. By presenting our findings to decision-makers, we aim to underline the economic necessity of investing in our grid infrastructure. This initiative will support the development of well-informed policies and funding allocations, ensuring that future grid interruptions are fewer and less severe. Our goal is to equip Texas with a robust and resilient energy system that can withstand the challenges of tomorrow, safeguarding our economy and enhancing the quality of life for all Texans.
As we proceed, your insights and inquiries are invaluable. For further information or to engage in this discussion, please contact Ethan Miller at ethan@txses.org, or Mohammad Alkhatib at mohammed@txses.org. Together, we can pave the way for more resilient energy solutions in Texas.
Ethan Miller, TXSES Research Associate – Policy and Government Affairs
One might think that after several years of recurrent issues with the stability of the electric grid, Texas would have established a standard system for valuing the cost of grid failures. Unfortunately, that is not the case. However, the Texas Solar Energy Society is proud to announce that it has begun the daunting task of estimating the cost of grid service interruptions to the Texas economy. Based on preliminary information from some municipal utilities, electric cooperatives, a handful of investor-owned utilities and generating retail electric providers, TXSES estimates service interruptions cost Texas at least $2B in losses in 2023. When complete, this data can be used to budget for grid reforms, save ratepayers money and increase grid reliability. To get an idea of what the final project will resemble, check out Local Solar for All’s The Economic Impact of Michigan’s Unreliable Power Grid.
TXSES calculates these costs using the Interruption Cost Estimate (ICE) calculator from Lawrence Berkeley Labs, Nexant, and the US Department of Energy. The ICE Calculator accounts for the direct costs of interruption (electricity that is generated that doesn’t hit the grid, etc.), as well as indirect costs based on FEMA formulas (cost of expired food, forgone work hours/business meetings, etc.). For the calculator to work properly, it needs measures of reliability like SAIDI (System Average Interruption Frequency Index); SAIFI (System Average Interruption Duration Index), and CAIDI (Customer Average Interruption Duration Index) scores, as well as customer counts, both residential and nonresidential. There is a maximum limit to the number of customers that can be run at one time using the calculator, so analysis has to be at a smaller scale. TXSES is using the scale of utilities (municipal utilities, co-ops, investor-owned utilities, and generating retail electric providers).
Currently, TXSES has acquired and compiled available data from the Energy Information Administration (EIA), the Public Utility Commission of Texas (PUCT), and Public Citizen. The EIA-861 forms report data from some municipal utilities and co-ops but the forms are limited in reporting on competitive markets. PUCT Dockets #54467 and #46735 provide SAIFI and SAIDI for some investor-owned utilities, but do not break down residential/nonresidential customer counts and are currently unusable. Public Citizen provides a list of all municipal utilities and co-ops in the state. While TXSES has neither complete data for the regulated nor unregulated markets, TXSES has a fuller view of data gaps within the regulated market. This is to say that while the current cost estimate is usable, it is far from complete and very likely a massive undervalue of full costs.
As TXSES continues working on this effort, be sure to follow along. Please reach out to Ethan Miller, at ethan@txses.org if you have any questions or are looking to get involved.
For nearly two years now, a coalition of clean energy developers, advocates, and experts from across the U.S. has been working to develop a better understanding of how to build the least-cost, most reliable grid possible. The outcome of this work by the Local Solar for All (“LS4A”) coalition (localsolarforall.org) documents the exciting and money-saving potential that better models and analysis reveals is available from aggressive growth in the distributed solar and storage markets.
The LS4A team joined forces with Vibrant Clean Energy, a modeling firm based in Boulder, Colorado to use a new utility planning model called WIS:dom-P (“Weather-Informed energy Systems: for design, operations and markets”) to break through the limits of old-style utility models and, for the first time, understand the role that solar + storage distributed resources can play in decarbonizing our economy in an affordable and sustainable way.
The WIS:dom-P model was built to thrive in big data in a way that the old models simply can’t handle. With 10,000 times more data points and a resolution down to five minutes, three square kilometers, and one kilowatt, the model can identify the right resource in the right place at the right time to serve demand for electricity most economically. Not only can the model evaluate both large and small resources (below the 69 kV grid level), it also evaluates each kind of supply along with the cost to transmit and distribute it. Solving for electricity demand from a systems perspective reveals new savings opportunities across 80% of the hours in the year.
These amazing benefits arise for several reasons—some expected and some delightfully surprising. Because distributed solar and storage match better with load, these right-sized resources reduce over-building of expensive generation. The WIS:dom-P model can also identify when more expensive local resources are actually a better deal than cheaper resources when accounting for transmission and distribution costs. Even more amazing, the model shows how distributed resources actually reshape the system load that the utility system must serve, getting higher value and more savings out of the large-scale resources, especially wind and solar, as well.
The LS4A team launched its campaign with a study of the lower 48 U.S. states and learned that by optimizing and coordinating distributed solar and storage in utility system planning, the U.S. could eliminate 95% of the carbon emissions from the electric system and save nearly $500 billion in total system costs compared to a business-as-usual approach. The least-cost system has 247,000 MW of distributed solar by the year 2050 and relies on more than 9,000 GWh of utility and distributed storage, about evenly split, by the same date. A distributed solar and storage future also includes two million more jobs than the business-as-usual approach.
The LS4A coalition is planning even more analysis, including evaluation of proposals under discussion at the federal level. And since releasing the first national study, the team has studied the grids in Illinois, California, and New York and added evaluation of economy-wide electrification and impacts on environmentally and economically disadvantaged communities. Every study shows that the savings and other benefits only grow with these strategies. The future is clearly going to be much more distributed—with solar and storage—if we want an affordable, low-carbon energy economy.
Karl’s career spans more than 30 years in clean energy, electricity regulation, sustainability and advocacy. Experienced as a public utility commissioner, he’s also been a federal R&D executive, utility executive, advocate, and attorney.
