What is Demand Response and How Does it Power Virtual Power Plants?

Will Texas See More Virtual Power Plants?

Virtual power plants convert saved energy into power for the Texas grid. Find out how conserving electricity can acutally cut your monthly bills.

The way we use and manage power is changing. One new idea making a big impact is demand response (DR), which helps create virtual power plants (VPPs). Several new Texas electricity providers are using this idea to improve how we use Texas power. You may live near a VPP and not even know it! And even if you did know, you might not see any outward signs. 

What is Demand Response?

DR is when homes and businesses use less power during times when everyone else is using a lot. This helps prevent blackouts and reduces the need for more power plants. So instead of making more electricity, utilities ask people to use less. They might send a message a few hours before a peak time asking people to cut back. Some energy providers offer this to customers in the United Kingdom already. Several are already bringing this technology to Texas. If customers reduce their use when asked, they get rewarded with money. 

What is a Virtual Power Plant?

When enough customers participate in DR, the effect on energy supply can be massive. A VPP is a group of small energy resources, like home batteries, solar panels, and smart devices, that work together to act like a big power plant. Instead of making new electricity, a VPP manages how and when these small resources use and store energy. This helps balance supply and demand on the grid. And your electric bill won’t jump sky high. 

Conserving energy to cut your electric bills can now help you save even more money. By using less energy, you and help create virtual power plants that keep Texas electricity rates stable.

For example, a retail energy provider creates a VPP when it connects to smart thermostats and electric vehicle chargers. Through DR agreements, they adjust these devices during peak times to reduce demand, helping keep the grid stable.

In Texas, VPPs are growing because the state supports flexible electric pricing. VPPs are a great solution to grid reliability issues. The Aggregate Distributed Energy Resource Pilot Project in Texas allows small energy devices to join the wholesale market, helping improve the grid. 

The Future of Virtual Power Plants

The future looks bright for VPPs as tech and regulations improve. In Texas, VPPs are already helping solve grid problems. As we add more small energy resources and improve DR, VPPs will become even more important. They will help us move to a cleaner, more reliable energy system. 

In the future, you may get rewarded for your demand response. However, you’ll still use some electricity. So, make sure you have the best plan for your home by shopping rates at http://www.texaselectricityratings.com/electric-rates.