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Resideo Shares Behind-the-Scenes Insight into an ERCOT Energy Emergency

How Resideo Energy Management helped Texans During an Electric Grid Emergency

Michael Siemann's headshot.By: Michael Siemann*, PhD, Distinguished Engineer at Resideo

In speaking with my friends and family, they don’t always understand Demand Response (DR), or what my team does. To explain how we help manage the grid stability through DR, I use words like ‘remotely shifting energy' or point to recent emergencies, including Winter Storm Uri that hit Texas in February 2021, which dominated news headlines.

It was during that 2021 storm that ERCOT (the Electric Reliability Council of Texas) called its last emergency. After 30 months of relative stability, ERCOT recently called a ‘level 2’ emergency

If you’re like many of my friends and family and still confused about DR and its impact on the electric grid, allow me to walk you through how this recent energy emergencies unfolded, what my team did to help communities keep lights on and how this may impact Texans' energy bills.

ERCOT Emergency Explained

On Sept. 6 at 7:15 p.m. CDT, ERCOT called an emergency ‘level 1’ (known as EEA1, or the first of three levels of emergency operations). The situation escalated quickly after that: at 7:25 p.m., ERCOT reached 1750 MW (megawatts) of reserves and issued EEA2, the first time it’s reached that emergency alert level since February 2021. While some generation and energy management resources were deployed during EEA1, the 'level 2' is more severe and prompted a complete response by committed DR programs. 

ERCOT was able to curb demand faster than during the Feb. 15, 2021 emergency by using DR and other measures providing capacity, which kept the energy reserves above the necessary level to maintain grid frequency. Had that level dropped, ERCOT would have triggered EEA3 and the instruction of the TDUs (Transmission and Distribution Utilities) to institute rolling blackouts. This is ultimately what caused the rolling blackouts in Texas in February 2021: traditional generation sources failed to deliver (due to unpreparedness for unprecedented weather events), and there were not enough DR or other resources at that time to respond adequately.

Resideo’s estimate, based on the load forecast and the prior day's energy demand, suggests that emergency measures across the grid moved 2 GW (gigawatts) of demand. This is a significant achievement for the load management industry, as DR performed as intended and once again proved to be a reliable alternative to fossil fuel peaker plants. During those times, my team specifically works to keep homes as comfortable as possible while managing the amount of energy their HVAC system is pulling from the electric grid. We execute tailored adjustments to connected thermostats based on the thermodynamics of each home and past event performance to deliver the optimal response for the situation. Throughout extreme conditions like this we are also monitoring energy prices and availability alongside our utility and energy provider partners to anticipate what they will need and devise the strategy on how to act.

With over a decade of experience managing load in Texas, the Sept. 6, 2023 event was another chapter in our team's history of helping keep the power on. Our initial estimates indicate that we were delivering about 58 MW of capacity during the peak of the emergency, with an additional 65 MW remaining uncommitted for that time range. Measures like DR were sufficient to avert a much worse emergency.

Another tool ERCOT reached for was to ask the Texas Commission on Environmental Quality (TCEQ) for enforcement discretion which removed all emissions requirements for generation sources (ie, ERCOT could pull on any energy created by even the dirtiest of fossil fuel sources). At 8:27 p.m. ERCOT reduced to EEA1, and 10 minutes later removed the emergency altogether.

The energy emergency was quick, thanks in part to Texans participating in DR and ERCOT’s ability to nimbly pull all available resources. 

ERCOT_Load_Level chart on 06 SEP, 2022

Plot of load levels observed in ERCOT on Sept. 6, 2023. When ERCOT issued EEA2 load curtailment actions like Demand Response started reducing demand. This aligns with an inflection point in Net Load (Actual Load minus Renewable Generation). Data source: ERCOT

Conditions Explained

There are many dynamic aspects that contribute to the generation capacity available throughout the day – from how traditional fuel sources can modulate output based on fuel availability and economics, to solar and wind being driven by the weather. During the evening of Sept. 6, there were three outliers we observed that diverged from the previous weekly trends:

  1. The unrelenting heat this summer keeps driving record breaking demand levels. I doubt anyone reading this needs to be told about climate change nor population growth in Texas, but since late June ERCOT has set 10 new records for peak demand with August 10th at 85.6 GW beating the record from last summer of 80.1 GW, that’s over 6% load growth. Yesterday's peak at 82.7 GW beat the previous non-2023 September peak of 72.4 GW set back in 2021(a 14% increase).
  2. Wind generation had one of its lowest-performing days of the summer, couple that with the daily decline in solar generation as it ramps down at sunset, and overall renewables were the fourth lowest at that time in the last 30 days.
  3. ERCOT's load forecast underestimated the late afternoon and evening load by a few GW. Part of this may be attributed to the challenges data scientists face in training a model this year to accurately predict the behavior of all the large consumers running 4CP curtailment pretty much every day this summer.

Additionally, some energy detectives on Twitter suggested that a backup generator went offline around this time, though this morning at 12:08:32 a.m., ERCOT put out this statement on their operations queue: "No sudden loss of generation greater than 450 MW occurred on September 6, 2023."

ERCOT Renewables Generation Capacity Levels chart on 06SEP, 2022

Plot of generation capacity of the complete portfolio of renewables, solar, and wind on Sept. 6, 2023 and the average observed over the previous 30 days. Renewable generation was nearly 5 GW below the 30-day average at the time of the ERCOT Emergency.

Energy Emergency Results in High Energy Bills

These dynamics are going to impact Texans on their upcoming energy bills, as the cost of energy on the market has shattered records and will be passed on to customers in the future. August 2023 witnessed a more than doubling of the average Day Ahead and Real-Time energy prices compared to August 2022. This included nearly three hours spent at the market cap of $5000 per MWh (a feat nearly matched on Sept. 6 alone with seven, 15-minute settlement intervals reaching this level) and dozens of hours above $1000 per MWh. As context, the average retail price of energy paid by residential end customers in Texas is $145 per MWh (14.49 ¢/kWh), and mild months like April 2023 typically see average energy market prices below $25 per MWh.

ERCOT Energy Prices chart on Aug 2023.

There are two ways to track energy prices: prices published the 'Day Ahead' and in 'Real Time.'  The above shows energy prices observed in ERCOT (Settlement Hub average) during August 2022 and 2023. Both sets of prices in August 2023 averaged more than double that of 2022 with a clear shift from peaks in the late afternoon to evening.

One of the biggest challenges we have in this industry is that DR isn't evaluated and compensated based on how much value it can provide in weather driven emergencies. It's clear that DR is successful, and it requires a collective effort. We're continually grateful for customers that participated in the ERCOT energy emergencies and DR programs. Their minor adjustments are made for the greater good of their communities. For more information about Resideo's Energy Management Services visit Resideo.com/us/en/energy/

*About Michael: Michael Siemann, PhD, is a Distinguished Engineer at Resideo.  

Michael and the Energy Management Team are helping shape the future health and viability of the U.S. electrical grid while advancing clean energy technologies. While helping to drive the smart home transformation through its suite of technologies, the team also is enabling distributed energy resources to play a role in reducing climate change impacts.  

The Energy Management Team manages or participates in 198 U.S. utility demand management programs, which represent more than half the total U.S. electric meters. For more than a decade, the team has harnessed the power of big data through proprietary algorithms and load shaping technology to reduce energy management complexities. The team helps utility and energy providers by offering enhanced grid solutions that deliver grid reliability, physical market hedging and boosted efficiency, all while directly providing value for the whole home. 


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