Tesla has received approval from the Public Utility Commission of Texas (PUCT) to launch two virtual power plants for Powerwall owners in Texas.

Virtual power plants (VPP) are becoming one of Tesla’s most underappreciated products.

Tesla is using its existing and growing fleet of Powerwalls to aggregate their power capacity and offer electric grid services to utilities while compensating homeowners for using their home battery packs.

The company’s California virtual power plant has already proved successful in its first year.

Earlier this year, Tesla indicated that it planned to offer new VPPs in Texas and Puerto Rico.

Today, the Public Utility Commission of Texas announced that it has approved two new VPPs:

Two “virtual power plants” (VPPs) are now qualified and able to provide dispatchable power to the Texas electric grid, which is operated by the Electric Reliability Council of Texas (ERCOT). This marks a first for the state’s electricity market and is part of the Aggregate Distributed Energy Resource (ADER) pilot project the Public Utility Commission of Texas (PUCT) directed ERCOT to begin 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, strengthening grid reliability.

Texas wants to take better advantage of the small energy storage that Texans are deploying – primarily Tesla Powerwalls.

PUCT says that there is already 2.3 GW of capacity from small energy storage devices in Texas and 300 MW was added so far in 2023 alone.

For these first two projects, they are working with Tesla Electric customers in Dallas and Houston:

The two ADERs announced today 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. These two VPPs are the first to participate in the ERCOT wholesale market as ADERs.

Tesla senior vice president of Powertrain and Energy Engineering Drew Baglino commented:

Today’s launch of the first phase of the Tesla Virtual Power Plant is a milestone for Texas residents, Texas distribution utilities and the ERCOT grid. Our collective work has allowed Tesla to build a decentralized energy ecosystem that seamlessly integrates stored solar energy from Powerwalls onto the ERCOT grid.

For now, the VPPs are limited to 80 MW as part of the first phase.

Electrek’s Take

Tesla has already run a few VPP tests in Texas to demonstrate the value to the grid, and it has gained experience through its Tesla Electric products. I have a feeling that the 80 MW cap will be lifted pretty quickly. The Texas grid needs the capacity. It would make sense to take advantage of it as soon as possible.