Local Governments Can Achieve Texas-Sized Impacts from Distributed Energy Assets and Virtual Power Plants

The document outlines how Texas municipalities and counties can catalyze the adoption of distributed energy resources (DERs) and virtual power plants (VPPs) to address rising electricity demand and grid instability. It details the types of DERs—generation, storage, and demand-side—and explains how VPPs (referred to in Texas as aggregate distributed energy resources or ADERs) coordinate these assets for grid-level benefits. The briefing identifies drivers for adoption, including the Inflation Reduction Act and extreme weather events like Winter Storm Uri and Hurricane Beryl, and provides a framework for local governments to increase adoption through public education, zoning updates, streamlined permitting, and the enrollment of government-owned assets into VPPs.

• Distributed energy resources (DERs) are small-scale assets, typically ranging from 1 kW to 10,000 kW, categorized into generation (e.g., rooftop solar, CHP), storage (e.g., battery energy storage systems), and demand-side resources (e.g., smart thermostats, EV chargers).
• Virtual power plants (VPPs), known in Texas as aggregate distributed energy resources (ADERs), coordinate multiple DERs to manage demand surges, mitigate price volatility, and integrate renewable energy.
• Rapidly deployable DERs can address the critical need for new electricity supply in Texas, where energy-intensive industries like data centers and manufacturing are increasing peak loads, and large-scale infrastructure takes years to permit and interconnect.
• Extreme weather events, specifically Winter Storm Uri in 2021 and Hurricane Beryl in 2024, have demonstrated the vulnerability of centralized generation and power lines, highlighting the need for local power solutions that can support critical loads during outages.
• The Public Utility Commission of Texas (PUCT) has expanded an ADER pilot project launched in 2022 to better integrate VPPs into the grid, though challenges remain regarding limited DER adoption, consumer awareness, and utility software requirements.
• Local governments can reduce the 'soft costs' of DER installation by streamlining permitting; for example, the SolarAPP automated approach has reduced PV system installation costs by approximately 2%–13%.
• Texas has seen significant growth in small-scale solar photovoltaics, with net generation increasing by more than 158% between 2020 and 2023.

APA

RMI (2025). Local Governments Can Achieve Texas-Sized Impacts from Distributed Energy Assets and Virtual Power Plants. https://rmi.org/resources/local-governments-can-achieve-texas-sized-impacts-from-distributed-energy-assets-and-virtual-power-plants/

Chicago

RMI. Local Governments Can Achieve Texas-Sized Impacts from Distributed Energy Assets and Virtual Power Plants. 2025. https://rmi.org/resources/local-governments-can-achieve-texas-sized-impacts-from-distributed-energy-assets-and-virtual-power-plants/.

Wikipedia

{{cite report |author=RMI |title=Local Governments Can Achieve Texas-Sized Impacts from Distributed Energy Assets and Virtual Power Plants |date=18 February 2025 |url=https://rmi.org/resources/local-governments-can-achieve-texas-sized-impacts-from-distributed-energy-assets-and-virtual-power-plants/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025local, author = {{RMI}}, title = {{Local Governments Can Achieve Texas-Sized Impacts from Distributed Energy Assets and Virtual Power Plants}}, institution = {RMI}, year = {2025}, month = feb, url = {https://rmi.org/resources/local-governments-can-achieve-texas-sized-impacts-from-distributed-energy-assets-and-virtual-power-plants/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }