ERCOT began developing its Aggregate Distributed Energy Resource pilot project in June 2022.


Two ‘virtual power plants’ (VPPs) are now qualified and able to provide dispatchable power to the Texas electric grid, according to a recent Public Utility Commission announcement. The regulatory agency said the VPP additions mark a first for the state.

The VPPs are part of an Aggregate Distributed Energy Resource (ADER) pilot project that ERCOT began developing in June 2022. The pilot project tests how consumer-owned, small energy devices, such as battery energy storage systems, backup generators, and controllable Electric Vehicle (EV) chargers, can be virtually aggregated and participate as a resource in the wholesale electricity market.

“Small energy resources found in homes and businesses across Texas have incredible potential to continue improving grid reliability and resiliency by selling the excess power they generate to the ERCOT system,” said PUC Commissioner Will McAdams, in an August 23 statement.

The agency noted that Texans increasingly have invested in small energy resources, such as backup generators or solar panels that connect to battery energy storage systems. The agency estimates that Texas currently has 2.3 gigawatts of these small resources across the state, with 300 megawatts added so far in 2023 alone. An ADER represents the aggregation of devices that are located at multiple sites as a single resource. The ADER coordinates the operation of individual devices to collectively reduce demand or feed power to the grid. Through an automated process, the ADER responds to specific ERCOT instructions, allowing participating customers to sell their surplus power to the grid when called upon or reduce use. This is an additional source of dispatchable power for the ERCOT grid.

Pilot Project Criteria

ADERs are formed and operated by retail electric providers or utilities that sell electricity to homes and businesses. In the agency’s pilot project, compensation terms and participation requirements will vary depending on the provider operating the ADER. To qualify for the pilot project, an ADER must be able to produce at least 100 kilowatts, and each individual device in the ADER must be less than 1 MW. The average residential battery is about 5 kilowatts. The pilot project is currently capped at 80 MW of total participation to ensure a safe and controlled rollout, according to the PUC.

“As generation and distribution technology continues to improve, we expect to see more Texans taking advantage of these small energy resources in the future,” said ERCOT President and CEO Pablo Vegas. “This pilot project is an opportunity for us, the electric industry, and participants to learn how to harness these resources to support reliability in the ERCOT market.”

The two ADERs announced on August 23 involve Tesla Electric customers who have Powerwall storage systems in their homes and have agreed to sell their surplus power in the ERCOT market. One ADER aggregates Houston-area CenterPoint Energy customers and the other ADER aggregates Dallas-area customers served by Oncor Electric Delivery Company.

Additional information can be found in PUC Project No. 53911, the ADER Task Force YouTube, and the ERCOT website.

— R.A. Dyer