While the structure of the Texas market may have held back DER deployment due to the advantage held by large-scale energy providers, its competitive model could facilitate new business models to improve the effectiveness of DER usage.
According to the Rocky Mountain Institute (RMI), DERs are now the “least-cost, flexible, and equitable energy solution for customers, electric utilities, and grid operators.”
The RMI continued, “Under the right conditions, Texas has the potential to be a national leader in driving innovative business models and solutions that advance the deployment for DERs while still preserving its deregulated market structure.”
However, the TAEBA study stresses that policy changes will be needed if DERs are to reach their full potential. Regulators would need to open the competitive market to small providers, while utilities would have to show a willingness to reconsider some of their investment plans.
The researchers estimate that utilities invested a combined $40.6 billion in the transition and distribution network in Texas over the past decade. If DERs are integrated, the report projects that utilities could reduce grid spending by about $344 million per year, or about $2.6 billion over the coming decade.
Regulators have begun to take notice. In early 2019, the Electric Reliability Council of Texas (ERCOT) approved price increases in its region during periods of high energy demand. Energy Ventures Analysis (EVA) interpreted the move as an encouragement to customers to invest in distributed generation over the long term. Additionally, it pointed out that demand response programs would be more attractive because customers would save more.
One area of growth expected by EVA is in rooftop solar. Analysts project that by 2024, rooftop solar will have the capacity to generate over 3 gigawatts of energy in Texas.
“Elevated electricity prices could accelerate the deployment of rooftop solar in Texas— which could help sure up grid resiliency during summer months and defer potential transition investment,” write the EVA analysts. “Distributed solar could be further accelerated if commercial and industrial customers seek to reduce energy payments with investments in behind the meter storage.”
Jordan Smith is a freelance journalist and translator covering issues related to energy, the environment, and politics. His work has appeared on the independent news site Opposing Views, and at the Canadian Labour Institute.