Solving a Texas-Sized Energy Problem by Going Small

July 26, 2024

Solving a Texas-Sized Energy Problem by Going Small

By Kamil Cook

Like the rest of the country, many in Texas are worried about the predicted monumental electricity demand growth expected by 2030.One estimate from the Electric Reliability Council of Texas (ERCOT) predicts that peak power demand on its grid could "increase nearly 78% by 2030 to 152 gigawatts."This poses a huge problem. Suppose the solution does not include a concentrated effort to improve rooftop solar compensation - the rates a utility pays its customers for any excess electricity their solar panels generate - energy across the state or serious efforts to improve energy efficiency and demand response. In that case, regular Texans will unfairly bear the burden of solving this growth problem.

This demand growth presents a big problem for grid operators because there hasn't been growth like this in the last 20 years. Though business has boomed and the population has grown, energy efficiency upgrades had largely made overall net demand grow at a very slow pace. Today, things are changing. Data centers, crypto-miners, artificial intelligence data centers, the electrification of manufacturing encouraged by the Inflation Reduction Act, and the electrification of the oil and gas sector have contributed to a sharp rise in predicted load growth. This departure from business as usual means that the ERCOT grid also needs a departure from business as usual. To do this, we must think small.

By small, I mean on a smaller scale. Ironically, the solution to this big problem mostly comes from thinking smaller. Yes, we will need more large-scale generation (which includes large wind farms, utility-scale solar projects, and big batteries) and more transmission. Still, we will also need to make a more concentrated effort to reduce load-the electricity demand-where we can, and this is harder, given that most utilities think they lose money when load is reduced.

When we think small, we can better see the gaps to be filled without needing big and costly generation. It means efficient use of the grid that we have-a grid that only operates at about 40% efficiency.It is more efficient as the grid gets more strained, but it is only really strained for a handful of days a year. For the rest of the year, plenty of wires and poles exist to move electricity. Some ways to fill these gaps are increased energy efficiency measures and rooftop solar.

Texas ranked in the bottom half of all of the states for energy efficiency standards in 2022.By tightening up our homes and businesses, we can help residential homeowners, renters, and small businesses save on energy costs and reduce demand. Another way to reduce the overall load is by massively increasing rooftop solar throughout the state. Rooftop solar provides benefits to the owner as well as to the greater grid. A recent report released by the Texas Solar Energy Society shows that rooftop solar's value provided to the ERCOT grid is much higher than utilities often attribute it to be.By increasing the compensation homeowners receive for sending electricity back to the grid via their rooftop solar system, it will mean less need for big generation plants (that often fail under the intense pressures of our winters and summers), less congestion on our existing transmission wires, and greater electricity resilience and reliability for homeowners.

Thinking smaller can also help with the challenges we face from climate change. Hurricane Beryl hit Houston at the beginning of July and left millions without power for days on end. Most of this damage came from the local distribution grid-trees and flying debris downing power lines throughout Houston neighborhoods. For some Houstonians with a solar battery system, though, the lights stayed on.Even if every pole in your neighborhood is knocked down, a solar battery system can continue to power your home as long as the sun is shining. And when the grid is functioning, that solar-battery system can provide cheap electricity to the grid, helping power one's neighbors.

The ERCOT grid faces a challenge. But unlike 20 years ago, rooftop solar panels are much more affordable, and we have much greater access to more granular information about energy both on the large transmission and local distribution grids. This understanding allows for greater control for the utility and the homeowner. And this control allows for greater savings for the regular Texan. Instead of having to foot the bill to pay off new gas generators and transmission lines, that same money can go towards improving home energy efficiency and poles on the distribution grid.

Kamil Cook is a Climate and Clean Energy Associate in Public Citizen's Texas Office.

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