In Texas, hundreds of thousands of people will have the chance to save on their electric bills through a new virtual power plant that will be in place in the spring. While virtual power plants don’t generate power — they optimize it — they’re part of efforts to stabilize the grid and better manage electricity demand at a critical time in the energy transition.

Imagine you keep your house at 69 degrees on a hot day, said Renew Home CEO Ben Brown. 

“Power prices could go up 30%, 50%, 100% within a given hour,” he said.

His company’s new virtual power plant in Texas would have a smart thermostat cool your house to 68 degrees at the top of the hour, when prices are lower.

“Then in the second half of the hour, when electricity prices spiked by double, let it rise up to 69 degrees. That is a perfect example of how you’re saving customers money, but also the grid itself,” he said.

Those energy savings add up when you multiply them by thousands of customers, he said.

Doug Lewin, an energy consultant and author of Texas Energy and Power newsletter, said this project helps shift demand around so consumers can get more out of the electricity that’s already being produced, “rather than just curtailing it, which happens a lot now. We just literally just let power go to waste.”

And we have that extra electricity because of the nature of renewables — the sun is shining and the wind is blowing whether we use that energy or not.

“Those are resources where the supply of electricity doesn’t necessarily come when people are demanding it, but if you provide incentives, you can switch,” said Karen Palmer, a senior fellow and director of the electric power program at Resources for the Future.

Incentives like a cheaper energy bill, which is what consumers can get if they move their energy usage away from peak times.