Texas’ ERCOT approved an Aggregated Distributed Energy Resource (DER) Pilot Project. What challenges lie ahead?

Texas is on track to see a much stronger energy grid. ERCOT’s Board of Directors approved an Aggregated Distributed Energy Resource (DER) Pilot Project. 

This article is about,

  • ERCOT’s support for the powerful Aggregated DER Pilot Project
  • Challenges:  Get competitive power providers to enroll customers, complete ERCOT approvals by January 2023, and send Megawatts to the grid by February 2023 and more!
Tesla Megapacks, Angleton, Texas. Courtesy of Tesla, Inc.

When I first participated in a Workshop about Virtual Power Plants (VPPs) hosted by the Electric Reliability Council of Texas (ERCOT or Grid Operator) in May 2022, I learned Tesla created a successful VPP Pilot Program involving 64 Powerwall owners.

Source:  https://www.tesla.com/support/energy/powerwall/own/ercot-demo (accessed 10/23/2022)

Tesla presented the findings of that program to ERCOT in the VPP Workshop, and provided detailed data to ERCOT’s oversight agency, the Public Utility Commission of Texas (Commission) about the ability of small batteries to “paint over” the exact reliability signals provided by ERCOT and perform to the highest accuracy with those signals. I wrote about VPPs last June, “Tesla built a demonstration test in which 64 Tesla Powerwall battery owners participated in providing energy as an aggregate. The demo showed impressive performance, proving that there were no technical blocks to these owners providing power to the Texas grid.” 

Both ERCOT and utilities submitted filings on Tesla’s proposal to quickly integrate VPPs in an existing market program called Aggregated Load Resources.  With these stakeholders asking for a brand new market program to transition VPPs to the grid, and Tesla having proved the technology was ready and available today, the Commission supported an official Pilot that would allow companies like Tesla to actually get their customers compensated for the Megawatts they sent to the grid.  

ERCOT’s Landmark Support for Aggregated DER Pilot Project

Now Tesla is part of a much larger Pilot Program.  I was invited to make public comments on Oct 18 before the vote on this proposal, giving me 5 minutes to talk to people involved in decision-making at ERCOT. You can view my comments here

When the Board of Directors at ERCOT voted unanimously to approve the Aggregated Distributed Energy Resource (DER) Pilot Project, I knew we were witnessing history! 

This opens the way to allow all energy providers in Texas to choose to participate to aggregate energy stored in their customer’s Tesla Powerwalls, and deliver that energy to the grid during times of peak need.

Enrolling customers who have Tesla Powerwalls into VPPs also makes entire fleets of electricity customers smarter consumers in the days and hours before a weather crisis:  with more customers ready and able to switch from grid-sourced power to self-produced power or vice versa, automatically doing so in a VPP in real-time, responding to what the grid needs, means utilities will struggle less to find the demand reductions they need to keep critical feeders and neighborhood lights on.  

Tesla Powerwalls preparing for anticipated storm. credit James Locke.


The Aggregated Distributed Energy Resource Task Force (ADER Task Force) has an important responsibility. The ADER Task Force met monthly to assist ERCOT in developing the VPP program.  Members of the public are encouraged to participate. The Task Force is formed of 20 experts selected by the Commission and will convene for at least three years to build a strong DER pilot program. Jason Ryan is the Chair and Arushi Sharma Frank is the Vice Chair.

Pictured:  Jason Ryan, Arushi Sharma Frank speak at an ADER Task Force monthly Workshop in Texas, open to the public. The co-sponsor of the ADER Task Force, Commissioner Will McAdams joins them for comments. 

ADER Task Force has monthly Workshops open to the public. The 1st Workshop was on Aug 17, the 2nd Workshop on Sept 12, and the 3rd Workshop was on Oct 12. 

Get Megawatts in the Market by February 2023

At the first ADER Task Force Workshop, Arushi explained the goal to get Megawatts in the Texas market, “One of the things that I want to mention is that the first goal for us as a team is to figure out what we do to get something done by the end of the year that will allow us to just get Megawatts in the market. All of the objectives we have are about studying the impact on the distribution system, studying reliability value, studying cost allocation, and studying the effectiveness of VPPs providing service to the grid. We’re not going to have that data if we don’t get the Megawatts in.” (The end-year goal has since moved to Feb 2023)

Phase One – ADER Pilot Program

The ADER Task Force is delivering on several objectives laid out in the sponsoring Texas Commission’s Memo.   These topics present challenges to overcome and also represent core success metrics that the ADER Task Force wants to build over the next three years.  

The ADER Task Force meetings have included materials shared with the public at every meeting (you can find them in Texas PUC Project Number 53911).  In the first of many quarterly reports the Task Force will file publicly, they shared challenges and insights that needed to be gained in “Phase 1” of the ADER Pilot Program: 

“1. Assess the operational benefits and challenges of ADERs and address those challenges to allow meaningful use of ADERs; 
2. Understand the impact of having ancillary services and energy delivered by ADERs and assess how ADERs can best be used to support reliability; 
3. Assess challenges to incentivizing competition and attracting broad ADER participation while ensuring adequate customer protections are in place;
4. Allow Distribution Service Providers (DSPs), the Commission, and others to study distribution system impacts of ADERs which inject to the grid; 
5. Evaluate the impacts to transmission system congestion management associated with the dispatch and settlement of ADERs at a zonal level; and 
6. Identify potential pilot project enhancements and study the need for and benefit of transitioning distribution-level aggregations to different levels of more granular dispatch and settlement and evaluate more complex use cases and business models.”

Source: Page 5, first ADER Task Force Quarterly Report, available at https://interchange.puc.texas.gov/Documents/53911_18_1241809.PDF 

Technical Challenges

In the October Workshop, Arushi explained some additional behind-the-scenes challenges faced that I was not aware of, related to integrating various distributed technologies customers have with multiple energy providers or utility systems.   “It is hard actually to do third-party integration for anything – I mean we still have iPhones and Androids with separate chargers – we can’t just plug one charger cable into the other product,  and the same is true for the most sophisticated inverter-based technology out there today. We do not have universal interoperability as a standard, and the closest thing that we’ve come to it as an industry, at least in this country, is 2030.5 and that is a big struggle [to implement] for OEMs and manufacturers of inverter- based products.”

In the early days of developing the ADER Pilot, Arushi also published a technical note explaining core challenges and guiding principles under which Texas will learn from by doing its first VPP program.  Those included: (i) understanding the impact of carrying ancillary services (grid reliability services like balancing demand and supply in real-time) on the distribution system (the low voltage lines carrying electricity from consumer homes) (ii) getting competition in VPP programs in competitive electricity choice areas of Texas (iii) understanding if there will ever be enough VPP batteries out there to cause congestion related to “exporting” energy back to the grid and how ERCOT will handle that (iv) how to help customers understand their compensation and ways to participate under new VPP programs, and (v) ensure that VPP programs can evolve and scale over time but remain simple and easy to understand for customers. 


The Electric Reliability Council of Texas (ERCOT) has a huge task, and that is to manage the flow of electric power to more than 26 million Texas customers — representing about 90 percent of the state’s electric load. ERCOT’s Board voted unanimously to approve the Aggregated Distributed Energy Resource (DER) Pilot Project, ushering in a new era for sustainable energy in Texas!  But, there are challenges and here are just a few,

  • Get competitive power providers to enroll customers.  This process should be simple and easy to understand for all customers.
  • Complete ERCOT approvals by January 2023
  • Send Megawatts to the grid by February 2023 

This article went into great detail and will be a great reference to anyone interested in either observing or participating in the growth of sustainable energy in Texas and beyond. 

Austin, Texas. Dawn of Liberty. Goddess of Liberty at Sunrise. Over the Texas State Capitol Building. Shot with special permission. Christopher Sherman

I would love to share four more interesting articles with you that relate to Tesla Energy!

What is ERCOT? The Electric Reliability Council of Texas (ERCOT) manages the flow of electric power to more than 26 million Texas customers — representing about 90 percent of the state’s electric load. 

Article Exclusive to What’s Up Tesla – October 23, 2022. All Rights Reserved. “My goal as an author is to support Tesla and Elon Musk in both making lives better on earth for humans and becoming a space-faring civilization.” – Gail Alfar Header Image is Courtesy of Tesla, Inc.

As Batteries begin to replace fossil fuel power plants, what are 4 challenges to overcome?

Tesla Megapacks at Alaska’s Kenai Peninsula. Credit: Tesla

You are living in the early stages of the transition to clean energy.  In the coming years, expect most gas and coal peaker plants to close.  These will be replaced with battery storage of mostly solar energy. 

This article is about four challenges that will be overcome for this incredible transition to succeed.

UPDATE: Elon Musk saw this article on Twitter, and replied to it on July 25, 2022, calling it a “Good article.” I hope that you’ll enjoy it as well!

#1 Increasing Supply of Refined Lithium

There is currently not enough refined Lithium, and this provides a challenge in the transition to clean energy. Tesla is working to scale battery production with refined Lithium at Giga Nevada and the new Megafactory in Lathrop, California.

At the Q2 2022 Earnings call, Elon Musk emphasized the need for more refined Lithium, the component needed for batteries.  Elon said, 

“I’d like to, once again, urge entrepreneurs to enter the lithium refining business.”  Elon Musk

Elon Musk revealed in a recent interview with Johnna Crider that extremely pure battery-grade lithium hydroxide or lithium carbonate is needed to prevent breakdown in the battery cell, 

“For example, with lithium, it’s more lithium refinement than it is the actual mining. So you better take the ore that contains lithium, and you’ve got to refine it and get it to battery-grade lithium hydroxide or lithium carbonate. And it has to be extremely pure. Otherwise, you could have a breakdown in the cell.” Elon Musk

#2 Scaling Battery Manufacturing

Scaling battery production is a constant challenge as processes must always be flexible enough to improve.

Building batteries faster and at larger scale will occur in order for our world to transition to clean energy. Tesla is addressing this challenge and currently building batteries ranging in size from 13.5 kWh Powerwall to 3000 kWh (3 MWh) Megapack.  Large and small batteries are needed to combine with others to form massive power plants, replacing old-style gas and coal energy with solar. 

Tesla Energy Engineer Mike Snyder speaks against the backdrop of 256 Tesla Megapack battery units on 33 concrete slabs at Moss Landing

Mike Synder of Tesla Energy, spoke at the opening of Moss Landing Elkhorn Battery last month, saying Megafactory Lathrop will produce ~ 40 GW hours of Megapacks a year,

“The Megafactory fully ramped can produce up to 40 GW hours of Megapacks per year.  For context, 40 Gigawatt hours is approximately 50 of the projects you see behind us here, being produced each year here in California and really around the world.”

#3 Working with Existing Infrastructure to Streamline Clean Energy Installations

Tesla Megapacks, Angleton, Texas. cr: Tesla

It is difficult to integrate the existing older infrastructure seamlessly with Tesla’s new hardware and software system, and it has to be done.  Moss Landing near Monterey, California is a location known for decades as exclusively a gas peaker plant site. Thus, it contains physical infrastructure needed to wire energy to customers. Snyder spoke about this challenge,

“There’s a lot of work and figuring out how to integrate these large projects into our existing infrastructure.

As the projects become larger and larger and more powerful those problems become more nuanced and more complicated to solve, and we all have to work to do that together.

Its about landing the wires here at a critical substation, like Elkhorn, or it’s about assessing the grid impacts at different interconnection points in the grid.

All of those problems become much more interesting for engineers and much more complicated to solve, and we need to be doing that together.

And really, as we grow we need to collectively assess how best to leverage such a flexible, fast-acting, bidirectional resource like we’ve never really had. It’s truly an exciting time to be in the industry!”

#4 Updating Local Policy to Encourage Virtual Power Plants

As Tesla Energy works to meet the demand for battery storage systems with Megapacks, another way to meet demand is through aggregating together Tesla Powerwalls that individual people like you and I own to form Virtual Power Plants.

It takes time and effort to change old ways of thinking at state and local levels.  Tesla’s Energy Policy team is working in my home state of Texas to help get virtual power plants online.  I wrote about that last month in “Tesla’s Texas Virtual Power Plant ASAP.”  Although the process might seem slow as molasses in wintertime, eventually it will happen, and there are things you can do to support these efforts! (I list some at the end of this article).

It was a change in policy for PG&E to allow ~1500 California residents who own home Tesla Powerwall batteries to volunteer to join together to form a virtual power plant.  PG&E announced they will “call load management events for participating customers, directing their battery to discharge when there is high demand for electricity.” 

A positive policy change led to the “Emergency Load Reduction Program [ELRP]” which aims to discharge stored battery energy to the grid during high electricity demand. Tesla Powerwall owners are the foundation of this program. According to a news release, the ELRP is managed by PG&E, San Diego Gas & Electric, and Southern California Edison. 

These programs and similar ones will eventually be seen in many states and in countries around the world over time.


  • Having a constant and reliable source of refined grade lithium is a challenge.  This must be achieved in order to scale battery manufacturing.
  • Tesla Energy leader Mike Synder voiced the challenge of working with existing infrastructure.   “There’s a lot of work and figuring out how to integrate these large projects into our existing infrastructure. As the projects become larger and larger and more powerful those problems become more nuanced and more complicated to solve, and we all have to work to do that together.” 
  • Local policies are a challenge.  Transitioning to clean energy means giving up the old ways of relying on gas peaker plants.  Tesla Energy Policy team aims to continue to work with local policy leaders in order to speed up the transition to sustainable energy.

Here are a few ways you can help:

If you own a Tesla Powerwall, sign up to participate in a pilot program if it is available in your state.  Currently, Texas has a three-year pilot program in the planning stages!

Join the Bros. for Decarb. Their motto is “just a group of Bros who care about decarbonizing the global economy as fast, cheap and reliable as possible.”  They can be found on twitter and they also sell t-shirts with LFDECARB to subtly remind us that the Southeast is often ignored in DECARB.  All their profits go to @energyalabama

Photo in downtown Austin, Texas by Karsten Winegeart on Unsplash

I would love to share a few more interesting articles with you that relate to Tesla Energy!

Article by Gail Alfar. Exclusive to What’s Up Tesla – This blog post was created utilizing STARLINK satellite services. All Rights Reserved. July 24, 2022. If you can support this blog financially, info is at “How You Can Support.”

Tesla Autobidder

Hello! Welcome back to What’s Up Tesla! As a Tesla owner and supporter, I am constantly learning about the incredible creations of a company I once just associated with nice cars and solar products. Though it was confusing at first, I have come to an understanding of yet another aspect of Tesla. Autobidder is an amazing piece of software created by the Tesla team. I am excited to share Autobidders’ incredible features with you and explain why it is so important.

Tesla Solar Panels and four Powerwalls [credit: Tesla]

Tesla creates software to optimize battery storage systems. The purpose of Tesla’s Autobidder software is to allow the owner of a Tesla Powerwall to sell their excess power to the grid automatically and at the best price. The software automatically bids a competitive price to a buyer. Tesla explains Autobidder,

Autobidder provides independent power producers, utilities, and capital partners the ability to autonomously monetize battery assets. Autobidder is a real-time trading and control platform that provides value-based asset management and portfolio optimization, enabling owners and operators to configure operational strategies that maximize revenue according to their business objectives and risk preferences.

Autobidder is already being successfully deployed in South Australia at the Hornsdale Power Reserve (HPR). This market bidding has added competition to drive down energy prices. Tesla Powerwalls and Megapacks are much more valuable assets to their owners if they are managed by the Tesla Autobidder System. Tesla explains it this way,

Batteries are highly flexible assets, but they require smart strategies and software to realize their full value. Autobidder allows owners to realize this value by handling the complex co-optimization required to successfully stack multiple value streams simultaneously, including:

Wholesale markets, including energy, ancillary services and capacity

Transmission & Distribution-level grid services

Renewable firming and shaping

Bilateral contractual arrangements

Other portfolio needs

Telsa Megapacks and Solar [credit: Tesla]

“Autobidder operates at every scale: from aggregations of behind-the-meter residential systems to 100 Mega Watt utility-scale installations” – Tesla

Example of Tesla Autobidder Software in action [credit: Tesla]

Tesla Ecosystem Includes Autobidder

The Tesla 2021 Impact Report explained how Autobidder is part of the Tesla ecosystem,

“We are designing and manufacturing a complete energy and transportation ecosystem. We both develop the technology behind this ecosystem and focus on the affordability of the products that comprise it. We seek to achieve this through our R&D and software development efforts as well as through our continuous drive to develop advanced manufacturing capabilities.” – Tesla

My thoughts

I expect the electricity grid in my state of Texas to improve rapidly when ERCOT allows residential battery storage to create temporary microgrids to help in emergencies like tornadoes, hurricanes, and other extreme weather conditions. When Tesla Powerwall customers in Texas and beyond can participate in the free market and sell power, families will stay safer including yours!

If this topic interests you, consider attending a workshop through ERCOT hosted by Tesla, “Tesla Virtual Power Plant Workshop Related to OBDRR041 by Webex Only.” Date/Time: May 31, 10:00 am. If you are unable to attend, the meeting should be available in the archives here.

Downtown Austin, Texas [credit: Jeremy Bank]

Gail Alfar, [Edited by Sarah Alfar] Exclusive to What’s Up Tesla – All Rights Reserved. May 29, 2022

Tesla Solar System

This is the year to invest in solar. Putting money into a Tesla Solar Roof or panels with Powerwalls is a smart choice.

For a long time, most of us assumed we should reliably purchase energy from a local utility. The era of expecting a local entity to offer a never-ending supply of affordable energy has come to an end.  Today people can generate their own energy.

The decision to go solar may be more affordable than we once thought

Vi To, father of two and homeowner in Dallas, shares with us why he bought Tesla solar panels and powerwall, “Texas had a scary Snowmageddon last winter where we lost power for one day and neighbors and friends lost it for ten days in freezing temperatures.  I started to seriously look for solutions/backup power options.” 

Vi likes to crunch numbers, and he shares that he spent about $50k on his Tesla Solar Panels and Powerwalls.  After a 13k federal tax credit, he financed through Tesla for 10 years, so he pays $270 monthly to Tesla instead of paying $300 monthly to the utility company.  “My system pays for itself in 5-7 years and then its free power thereafter,” he adds that he “also saves $200 a month by driving a Model Y.”

Would You Sell Energy to Your Local Grid?

Tesla has invited Solar and Powerwall owners like Vi to join in a demonstration to show that a fleet of powerwalls can be a source to power the Texas public utility grid.  In this way, people who are part of the Tesla fleet may one day sell power to ERCOT.  

“Powerwalls like yours can be a powerful tool to accelerate the grid’s transition to sustainable energy. 
Opt-in to our technical demonstration to help Tesla and ERCOT prove that a fleet of Powerwalls can provide the same services as conventional power plants with distributed clean energy.  
This is a valuable step toward Powerwalls’ paid participation in ERCOT markets.”  -Tesla

Increasingly people like Vi are proving they can generate their own energy.  They are showing that solar is more reliable than their local utility. Their word of mouth is just one indicator of the strength of solar power. Supporting the wider electricity grid will soon be another indicator.  In short, solar and powerwalls work together to perform the important job of bringing energy to all people.  The more that people invest in solar, the safer everyone will be from events that are beyond our control. 

But above all, I say that we are transitioning into a world where many people will be helped by the intelligent system that Tesla is pioneering.

One day, it will seem ridiculous that people ever relied so heavily on utility companies for energy. 

 “I think the beauty of the product is that you can’t tell it’s solar, most people come by, they have no idea.” - Tesla Solar Roof Owner

Credit TTVZ NewsChannel 21 – Bend Roofing Co. first in C.O. to install Tesla Solar Roof [10/4/21]

In writing this blog post, I kept thinking about the amazing work that Elon Musk is doing to help Ukraine. Tesla and SpaceX employees not only facilitated bringing Starlink to Ukraine, but they also scrapped together parts last-minute from Tesla Giga Berlin to create a system for humanitarian purposes. Through a system linking solar panels to Tesla Powerwalls, they showed how to power up Starlink satellite receivers. This is another reason why I am willing to invest in Tesla Solar. It is a creative system designed to help ultimately help humanity.  

Thanks for reading my blog post. I look forward to creating interesting takes on Tesla to share with YOU most Saturdays! Find out more about Tesla Solar here.

Austin, Texas by Mitchell Kmetz on Unsplash

Article header photo Tesla Solar Panels, Powerwalls courtesy Tesla

Gail Alfar, Exclusive to What’s Up Tesla – All Rights Reserved. March 12, 2022