Energy Efficiency and Demand-Response: Tools to Address Texas' Reliability Challenges

Texas has recently experienced major electric reliability problems, as illustrated by large load shedding during Winter Storm Uri in February 2021. This event reflected the extraordinarily high demand for electric home heating (from inefficient homes and equipment) combined with the loss of 50% of the state's generation fleet (due to freezing weather, fuel supply, and equipment failures). The Electric Reliability Council of Texas (ERCOT), the power system serving 90% of Texans, also faces summer supply challenges, as illustrated by calls for power conservation in June 2021. In that case, the shortage was driven by a large number of plants being out of service for unplanned repairs. ERCOT's energy-only wholesale market design and evolving generation resource mix are widely viewed as complicating the task of maintaining reliability as the power supply mix changes.Numerous solutions have been proposed to address these problems, including subsidized winterization of existing power plants and critical grid infrastructure, and construction of many new power plants. This paper looks at seven residential retrofit measures selected for their proven capability to reduce summer or winter peak electricity demand. We also considered the impacts of a planned federal phaseout of incandescent lamps on energy demand in Texas. This paper estimates these measures' potential to improve ERCOT's system reliability by cutting summer or winter peak loads or delivering grid flexibility services