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Texas can solve reliability problem through efficiency

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Henry Craver's picture
Small Business Owner Self-employed

As a small business owner, I'm always trying to find ways to cut costs and boost the dependability of my services. To that end, I've become increasingly invested in learning about energy saving...

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  • Oct 15, 2021
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Earlier this year, what many had long said was inevitable finally happened: Texas’ grid went down. The logic of the warnings was simple: The Lonestar state started building up its wind portfolio at breakneck speed last decade and shutting coal plants. Simultaneously, demand has skyrocketed thanks to migration into cities like Austin. When an uncanny winter storm hit last February, the crisis finally materialized, and it was nastier than even the loudest bell ringers had predicted. Over 4.5 million customers were left without power, some for several days. Estimates differ, but even the most conservative claim at least 210 people died because of the outages. 

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Ever since the tragedy took place, Texas power officials and industry commentators have speculated on how to best solve the state’s reliability problem. The most discussed solutions have been some combination of weatherization and new generation, gas for the most part. Such plans pose two big problems: Gas fired plants contribute to global warming, and the new generation and weatherization would cost Texans an arm and a leg. The plants proposed by Berkshire Hathaway Energy and Starwood Energy Group, that would only be used during extreme weather events, would cost a whopping $8 billion. 

That’s a lot of money for generation the state might only need once every few years. But what other option does Texas have? Energy efficiency, argues a new paper released by the American Council for an Energy-Efficient Economy (ACEEE). 

The report lays out seven residential energy efficiency and demand response programs that could lower summer peaks by 7,650 MW and winter peaks by 11,400 MW over five years. Such peak reductions could possibly erase the need for the new gas generation plan that’s so popular right  now. ACEEE estimates its plan would cost $4.9 billion over 5 years, almost 40 percent less than the Berkshire and Starwood proposals. 

The ACEEE proposes 7 big investments. On the building front:  incentives for attic insulation, smart thermostats, electric furnace upgrades, electric water heaters and heat pumps. The report also calls for demand response programs that would target air conditioning, ev charging, and water heating. Many of these initiatives are on the table right now because Texas has failed to invest in basic energy efficiency measures over the years. It’s low hanging fruit, really. 

The ACEE’s report contradicts the industry’s diminishing interest in energy efficiency. In late 2019, the Energy Efficiency Impact Report painted a grim picture of the country’s energy efficiency status: Property Assessed Clean Energy investment, which is an instrument used to finance energy efficiency upgrades on private property, was beginning to slow after seeing a rapid rise from 2012 to 2017. Instead of trying to reverse this trend, utility carbon cutting plans, like the 2021 Northwest Power Plan, seem to be pay little attention to conservation. 

New, clean generation is vital to the future of our grid and our planet, however energy efficiency still has a role to play. The ACEE report proves that.

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Robert Borlick's picture
Robert Borlick on Oct 20, 2021

I have read the ACEEE White Paper and respectfully disagree that energy efficiency will have any long-term effect on ERCOT power system reliability.  The reason is that developers will simply defer the amount of new generating capacity they will add into the ERCOT until the economically-driven reserve margin is restored.  The authors of the White Paper do not appear to understand the mechanics of how capacity is attracted to the ERCOT market through scarcity pricing.

 

However, the demand response programs may have such an effect, depending on how they are implemented.  Within the next few days I will submit my critique of the ACEEE White Paper to the PUCT.  You can view my detailed comments there.

Bob Meinetz's picture
Bob Meinetz on Oct 28, 2021

Thanks, Robert. Please post a link to your critique when you get one.

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