East Texas' post-Beryl boost in distributed power unlikely to affect prices

The East Texas electric distribution system's slow recovery from the July 8 arrival of Hurricane Beryl will likely prompt more installation of distributed solar-plus-battery and fossil fuel generation systems, but an industry expert said this would likely have little effect on wholesale power prices in the area.

Almost 3 million electricity customers lost power across Texas in the wake of the storm, and about 260,000 East Texas customers remained offline a week later, prompting Texas Governor Greg Abbott to direct the Public Utility Commission of Texas to investigate why restoration efforts took so long.

On July 18, the University of Houston's Hobby School of Public Affairs and Texas Southern University's Barbara Jordan-Mikey Leland School of Public Affairs announced the results of a survey showed that 26% of respondents were planning to purchase a generator or upgrade maintenance for an existing generator.

Grid resilience efforts questioned

The Texas Advanced Energy Business Alliance on July 18 suggested Texas leaders "reevaluate the state's approach to grid resilience."

"Solar panels, battery storage, and other energy resources located in homes and businesses can provide significant relief for Texans who are disconnected from the grid," TAEBA Executive Director Matt Boms said. "Unfortunately, utilities have done their best to discourage their customers from having these critical resources in place, while doubling down with investments in costly gas generators that aren't there when people need them. Amidst this failure is a need to reassess what Texas is doing to keep the lights on."

CenterPoint Energy, who had the largest outage totals during the storm, about 2.6 million customers, said it could not respond in time for publication.

In December, ERCOT reported that its annual estimates of distributed generation resources had grown almost sixfold over the previous seven years, from 650 MW in 2015 to 3,850 MW in 2022. The largest increases were after the deadly mid-February 2021 winter storm that left about 4 million Texas power customers in the dark, some for days.

A reaction to disasters

"We generally see more backup system sales after these types of disasters, such as after the wildfires in California," said Joshua Rhodes, a University of Texas Energy Institute research scientist and non-resident fellow at Columbia University. "Only solar systems would have an effect on grid prices, as running a natural gas backup generator is too expensive and they are not generally allowed to backfeed to the grid in residential systems."

For utility-scale solar power, increased solar output since Hurricane Beryl has generally coincided with lower Houston Hub real-time on-peak locational marginal prices, in comparison with averages for the corresponding dates of 2019 through 2023.

As for the types of resources that might be installed after such disasters, Rhodes said solar without batteries do not produce power when the grid is down "so their outage resilience is limited."

"Solar plus battery systems can island a home and provide some resilience, but it is going to be expensive to have enough storage to fully cool a home in Houston in the summer, although partial cooling could be possible, but that would require a more sophisticated [heating, ventilation and air conditioning] system," Rhodes said. "Fossil fuel generators can provide a lot of power but need to be fueled to do so. Ones that are connected to the natural gas system are likely to be the most seamless but are going to be loud and cause a lot of local air pollution if a lot of them are in a small area."