Houston’s post-Beryl outages highlight benefits of distributed energy

Hurricane Beryl wrecked Houston’s power grid last week, leaving millions reliant on slow grid repair efforts or limited supplies of diesel generators to keep food and medicine from spoiling and air conditioners running amid deadly heat. But in the sea of toppled power poles and darkened homes and businesses, islands of power and light remained intact.

In the worst-hit parts of the country’s fourth largest city, large-scale fossil-gas-fed microgrids kept the power on at wastewater treatment plants, hospitals, senior care facilities, grocery stores, travel centers, and other locations.

And customers equipped with home solar-battery systems were able to keep themselves powered — and sometimes help their neighbors as well — without relying on the diesel generators roaring throughout the city.

These distributed energy resources — DERs, in utility parlance — could play a much more central role in how utilities handle the ravages of climate change–induced storms, energy experts say. What’s more, unlike emergency generators, they can also support the grid in the day to day.

As the country seeks to reduce its dependence on carbon-emitting fossil fuels, many distributed-energy experts say there is much more room to tap into solar and batteries for resiliency purposes. The clean resources can be integrated into gas-powered microgrids or aggregated into virtual power plants — combinations of solar panels, batteries, electric vehicles, and ​“smart” appliances. These VPPs can take over much of the role that central power plants now play on the grid. Being able to rely on them when disaster strikes is an added bonus.

“These technologies are here,” said Doug Lewin, president of Texas-based energy consultancy Stoic Energy and author of the Texas Energy and Power Newsletter. Data from Texas grid operator ERCOT shows just how much distributed generation — all resources less than 10 megawatts in scale — the state has added in recent years, including massive growth in smaller-scale solar systems that could power backup batteries during emergencies. 

As expensive, centralized efforts to harden the grid against future storms gradually take shape, these distributed programs could be a powerful interim solution. But Texas has been slow to adopt the policies and market structures to bring DERs to bear for storm resiliency, Lewin said.

“It’s about getting the policies lined up and using the incentives already allocated,” he said. ​“We could have this all in place, maybe not before the next storm — we’re right in the middle of hurricane season — but certainly by next year.”

How the grid breaks down — and why it’s so hard to repair it 

Hurricane Beryl, a Category 1 hurricane, was relatively mild compared to the Category 4 monsters that took down much of Puerto Rico’s power in 2017 and wrecked power grids across Louisiana in 2021. But it still knocked out many of the poles and wires operated by CenterPoint Energy, the utility serving Houston and surrounding Harris County, leaving 2.26 million of its nearly 3 million customers in the region without power.

Those outages weren’t caused by toppled transmission towers or flooded substations, Jason Ryan, CenterPoint executive vice president of regulatory services and government affairs, explained in a presentation during a Public Utility Commission of Texas (PUCT) hearing last Thursday. Instead, ​“this was a storm that was largely debris on the distribution system” — the low-voltage wires that connect homes and businesses to the grid.

And repairing that damage takes a long time. CenterPoint had restored power to nearly 1 million customers within two days after the storm faded, Ryan told the PUCT. But nearly half a million would remain without power over the weekend in ​“areas where we are having to rebuild the infrastructure,” he said. (About 130,000 customers remained without power as of Tuesday, according to local TV news reports.)

Last week was the second major weather-caused outage for CenterPoint this year. In May, a sudden windstorm, or derecho, knocked out power to nearly 1 million customers, with about 84,000 waiting a week for restoration. CenterPoint has had poor metrics on grid reliability for years now.

“The weak point is the wires and poles, and basically always has been,” Michael Webber, a University of Texas at Austin professor and energy expert, told CNN. ​“But it’s not a priority for the state.”

Across the country, utilities are undertaking multi-billion-dollar ​“grid hardening” projects — replacing aging wooden poles with metal or composite poles to withstand high winds and falling trees, protecting substations from floodwaters, and similar investments.

CenterPoint has asked the PUCT to approve its $2.3 billion grid-hardening plan, crafted in response to a state law passed last year that calls on utilities to protect against extreme weather like hurricanes or the disastrous grid outages during 2021’s Winter Storm Uri.

The utility certainly needs to improve its efforts to identify and fix weak points in its system, Lewin said. But that work will take years — and something must be done to bring relief to its customers in the meantime.

Why diesel generators aren’t a sustainable backup option 

Backup diesel generators are already common at critical facilities like hospitals, fire stations, and wastewater treatment plants. But they are far from an ideal resiliency tool.

First, there aren’t enough of them, as The New York Times reported last week. Stores had lines of people out the door trying to buy a limited supply, and Houston city officials were shuttling mobile generators between emergency cooling sites.

Diesel generators can also be dangerous. The Houston Fire Department told local TV news last Friday that it received nearly twice as many emergency calls for carbon monoxide poisoning — a risk of operating generators indoors — as for heat-related emergencies.

And then there’s the problem of choosing the right kind of generator. In 2021, CenterPoint agreed to spend more than $200 million to lease 500 megawatts of large mobile diesel generators capable of providing between 5 megawatts to 30 megawatts of power. The price tag for those generators eventually rose to $800 million. But many of those generators went unused last week because they were too large to serve on a broken-down grid, sparking anger among Houston residents.

“There’s a lot of frustration … about the mobile gen units that your company has,” PUCT Commissioner Lori Cobos told Ryan during last week’s PUCT hearing. On Monday the PUCT announced an investigation into CenterPoint’s response to Hurricane Beryl.

Ryan also hinted at another weak spot for diesel generators — availability of fuel. ​“We want to make sure we have sufficient diesel fuel for our emergency generation, because we expect these extended outages in certain areas,” he said at the hearing.

Distributed gas generators — better than gas power plants? 

Fossil-gas pipelines can survive high winds and flooding that take down power lines and make roads impassable for trucks trying to deliver diesel fuel. That’s made gas-fueled microgrids a go-to choice for resiliency in Texas — including those from Houston-based microgrid operator Enchanted Rock, which operates 500 megawatts worth of them in Texas today.

Of the 155 Enchanted Rock microgrids in the Houston area, 146 of them kicked in to provide power after the grid went down during Hurricane Beryl, said Allan Schurr, the company’s chief commercial officer. Nearly one third of those had been operating for at least 48 hours as of Friday, and some ran for more than 162 hours straight.

“This severe weather is increasing the frequency, we think, but also the duration of outages — because they’re kind of overwhelming the system,” he said. ​“Our customers have paid with their own money for reliability.”

Those customers include lots of H-E-B grocery stores, which became ad hoc emergency cooling and supply centers in the storm’s wake. H-E-B has complained about poor reliability from CenterPoint’s grid since 2015, and joined a host of groups protesting CenterPoint’s $200 million generator plan.

Enchanted Rock’s customers don’t just use their generators during outages, however. They also save money by using them to generate electricity on site to reduce their need for utility power throughout the several hundred hours of the year when the Texas grid is straining to meet power demand during heat waves or cold snaps — and when prices for grid power can skyrocket.

Distributed gas generators like Enchanted Rock’s can keep providing power even when large-scale grid disruptions like those that left millions without power during Winter Storm Uri make it impossible for large-scale gas-fired power plants to do so. They can also be built in much smaller increments than conventional gas power plants, Schurr noted. That could make them a far more effective target for the billions of dollars that state lawmakers approved last year to bankroll large-scale gas-fired power plants in the name of protecting Texans from grid outages, he said. 

What about solar and batteries?

Solar power isn’t just clean — it’s also increasingly the most cost-effective electricity source available. When the grid goes down, solar power can provide a portion of a site’s power needs while the sun is shining, and also charge batteries for use after the sun goes down.

Today, most of the larger commercial customers that Enchanted Rock serves require too much power to make solar and batteries a cost-effective backup option, Schurr said. Households, on the other hand, can ​“prioritize loads and say, ​‘I need my refrigerator working, I’ll charge my phone, I’ll run a fan, but I’ll forgo the air conditioning, the TV, the pool pump,’” he said.

That’s how Jeff and Jennifer Wright rode through post–Hurricane Beryl outages. They installed rooftop solar from leading U.S. residential solar installer Sunrun and two Tesla Powerwall batteries at their Houston home soon after moving there in 2021 from Puerto Rico, where they had lived through six weeks without power after Hurricane Maria struck the island.

“We knew Houston gets hurricanes and bad storms, and we knew we never wanted to be out of power again like that,” Wright said. The combined solar and battery installation cost about $60,000, he estimated. But being able to keep their food refrigerated, their lights on, and their phones and computers charged has offered the ​“kind of peace of mind we cannot put a price on.”

Most utilities in Texas don’t offer the net-metering policies that have driven rooftop solar adoption in other states. But the Wrights recently switched to a plan from a retail electricity provider that offers free electricity at night in exchange for higher rates during daytime hours, when Texas faces heat-driven stresses on its power grid.

By using their batteries to store and make use of more solar power during daylight hours, the couple has reduced their monthly electric bill from $165 to about $31, Wright said. These savings won’t pay off the cost of their system anytime soon — but they help add some economic value to the peace-of-mind decision to install it, he said.

“I’ve become an evangelizer about solar. I know it’s not accessible to everyone at the level we have it. But if you’ve got the means, go ahead and do it,” he said. ​“You may not get the largest system in the history of the universe, but it will keep you going when times could be really bad.” 

Getting more distributed energy to those that need it 

Paying distributed energy resources for the value they provide when the grid is up is a vital part of covering the cost of installing them so they’re available when the grid goes down. It’s also important for helping people who don’t have tens of thousands of dollars to spend to access those resiliency benefits.

So far, however, Texas lawmakers and utility regulators are moving far more slowly to put DERs — both fossil gas and clean options — on an equal playing field with utility grid-hardening investments and central power plants as part of the state’s overall grid-reliability strategy, Lewin said.

Take the state’s focus on big power plants for its primary fossil-gas grid reliability plan. SB 2627, a state law passed last year, calls for creating a $7.2 billion state-run low-interest loan program to support the construction of new power plants. The law also included a carve-out of $1.8 billion for microgrids using gas generators, solar, and batteries.

But as of today, the PUCT has yet to set up the process to apply for that $1.8 billion in funding, let alone determine how grants and loans to support those projects will work, Lewin said.

Matthew Boms, executive director of the Texas Advanced Energy Business Alliance trade group, sits on the committee advising the PUCT on this microgrid effort. ​“It’s going to take probably at least a year, year and a half for Texas to get this up and running,” he said. ​“We’re at the stage now where the technology is a little ahead of the policy.” He’s hoping that state lawmakers and regulators will speed that work, ​“given the frequency and intensity of these storms.”

Some promising options are beginning to emerge. CenterPoint and Enchanted Rock are working on a plan with the PUCT to stand up a ​“community microgrid” in Houston to power an entire neighborhood, Schurr noted.

That concept is similar to the microgrid that utility Commonwealth Edison has built in Chicago’s Bronzeville neighborhood, he said. That microgrid is anchored by an Enchanted Rock gas generator, but also integrates rooftop and community solar systems, batteries, EV chargers, and other large electricity loads that can be turned down and shifted to cushion against shortfalls in power.

Enchanted Rock’s microgrid customers in Texas haven’t yet integrated solar power or batteries, Schurr said, but ​“there are at least some openings for making that happen” in the future.

Elsewhere, smaller-scale solar-and-battery microgrids are already being built to help recover from hurricanes. Puerto Rico is the target of federal funds and private-sector investments to bring solar-battery systems to homes and communities. In Louisiana, a coalition of faith and community groups is building them at churches, clinics, and community centers that serve as disaster recovery centers. This Louisiana effort won $250 million in federal grants last year. The funding approved by Texas lawmakers is much larger, Boms noted: “$1.8 billion is a good chunk of change. We could do a lot with that to improve resiliency.”

Texas is also piloting what could become a groundbreaking virtual power plant program that aggregates the solar and battery capacity of individual homeowners. The Texas Aggregate Distributed Energy Resource Pilot Project launched in early 2023 and in August approved its first big participant, Tesla, which enrolled customers in Houston and Dallas who now get paid to allow their Powerwall batteries to inject energy when the grid needs it.

So far, however, only about 15 to 20 megawatts of VPP capacity has been enrolled under this program, Lewin said — far less than what other solar-rich states like California have been able to accomplish with VPPs. ​“I think it is time for the PUC to get really serious about moving that out of pilot, taking the training wheels off,” he said.

Texas has gotten this VPP program off the ground quite quickly, said Amy Heart, senior vice president of public policy at Sunrun, which operates solar-battery VPPs across the country. But as a member of the PUCT’s ADER Task Force, Heart has also identified some barriers to expanding the scope of VPPs under the program.

“There have been few [providers] that have been able to figure it out from a financial and technical standpoint,” she said. One challenge is a rule requiring participating batteries to provide ERCOT with digital status updates every five seconds, which requires costly dedicated communications technology to be installed in every home, she said. Another is a requirement that batteries commit to providing capacity for up to four hours at a time, which reduces the value they could provide during shorter-duration grid emergencies.

“One of the opportunities Texas has is the ability to leverage all of these resources to benefit the grid as a whole,” she said. ​“By reducing barriers and making it more financially affordable to invest in these on-site generation and storage assets, you’re going to be able to create not only a more resilient grid but a more affordable grid.”