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Home Power Devices Are Key to Solving US Power Woes, US Energy Official Says

(Bloomberg) —

Consumer-owned, small-scale energy devices, such as home car chargers, could be the answer for California and Texas as they struggle to meet demand for power during peak times, a top US energy official said.

Networks of solar panels, batteries, electric cars and smart appliances — called virtual power plants — can now be harnessed by utilities to help balance supply and demand, such as during heat waves, when power grids are taxed, said Jigar Shah, who oversees a loan program at the Department of Energy funded with the passage of the Inflation Reduction Act. As much as $100 billion is available for virtual power plants, Shah said.

By tapping into home power networks, which can reduce the need for traditional fossil fuel plants, utilities could save billions, Shah said on the sidelines of the RE+ clean energy conference in Las Vegas. 

Read More: Texas Grid Faces Another Test as Power Experts Assess Near Miss

“We think the electric utilities are looking to bury the hatchet and deploy distributed resources,” Shah said, referring to competition between utilities and home solar providers. With more customers adopting electric vehicles, utilities will be forced to manage their charging patterns to keep grids stable, which in turn will convince them of tapping into the value of other home energy resources, Shah said. 

Texas and California have resorted to rolling blackouts at times during hot summer evenings when solar power wanes at sunset but demand remains high from air conditioning use. Both states have launched programs that pay owners of home batteries for sending power to the grid during critical times.  

With peak demand rising and old gas and power plants retiring, the US grid will need to add enough capacity to serve more than 200 gigawatts of demand by 2030, according to a Department of Energy report on virtual power plants that was released Tuesday. 

If the country could triple the deployment of virtual power plants to as much as 80 gigawatts, it would help address the expected rise in demand while reducing grid costs by $10 billion a year, according to the report. 

© 2023 Bloomberg L.P.

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