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

October 13, 2021
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To meet its current power demands as well as the needs of its growing population, Texas must solve its major electric reliability problems, illustrated by widespread power outages during a winter storm in February 2021 and by summer supply challenges that led to calls for power conservation in June 2021. In response, policymakers are considering subsidized winterization of existing power plants and critical grid infrastructure, as well as construction of many new power plants.

Another approach is to expand Texas’ very limited set of energy efficiency and demand response programs, focusing on those with the greatest potential to reduce summer and winter peak demand. This paper analyzes this latter approach, with a focus on the residential sector. We find that a set of seven residential energy efficiency and demand response retrofit programs, deployed aggressively over the 2023-2027 period, could offset about 7,650 MW of summer peak load and 11,400 MW of winter peak load—approximately equaling the capability of the proposed new gas generators. The capital cost would be 39% lower than the proposed new gas plants while fully avoiding additional costs for generator fuel, maintenance, and transmission infrastructure.

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