Natural gas generation capacity in Texas is set to soar by 2030, necessitating the need to incentivize a bigger generation build out, according to top Texas officials.
The Electric Reliability Council of Texas (ERCOT), the grid operator for about 90% of the state, is facing a shortfall of generation capacity by 2030, CEO Pablo Vegas recently told the state’s Senate Business and Commerce Committee.
Texas generation sources include natural gas, coal, nuclear, solar and wind. The state now produces about 85,000 MW at maximum capacity, Vegas said. By 2030, the state may need as much as 150,000 MW.
Gov. Greg Abbott and Lt. Gov. Dan Patrick jointly sounded the alarm.
“That is only six years away,” the top Republicans stated. “If the new estimate is correct, the updated numbers provided by Mr. Vegas call for an immediate review of all policies concerning the grid.”
Last November, the state’s voters approved state Senate Joint Resolution 93 to create the Texas Energy Fund (TEF). It is able to provide a total of $5 billion in low-interest loans to build dispatchable generation.
At the beginning of June, the Public Utility Commission of Texas (PUCT) said it had received 125 notices of intent to apply for TEF loans. The requests could finance 55,908 MW of proposed dispatchable power generation projects for ERCOT.
“Texas has already received notice of intent to apply for $39 billion in loans, making the program nearly eight times oversubscribed,” Abbott and Patrick noted. “With the new projections for 2030, we will seek to expand the program to $10 billion to build more new plants as soon as possible.
“The average plant will take three to four years to complete, and new transmission lines will take three to six years to complete. Texas is currently the fastest state to approve and build new plants and transmission lines because of our low regulations and pro-business policies, but we must move quickly."
Vistra Corp., the largest electricity generator in Texas, recently unveiled plans to add up to 2 GW of natural gas-fueled capacity. Entergy Texas Inc., which is forecasting the need to add 40% more generation capacity to its fleet, has an expansion planned too. And NRG Energy Inc. is planning to develop 1.6 GW of quick-start natural gas power generation for the Texas grid.
ERCOT and state officials came under intense scrutiny in February 2021 following Winter Storm Uri. The extreme weather event struck several states hard, but most of the power outages were in Texas.
During Uri, ERCOT ordered a total of 20,000 MW of rolling blackouts to prevent a complete collapse of the grid. More than 4.5 million people in the state lost power, some for up to four days. Hundreds of people died and business losses were estimated in the millions.
Now ERCOT is facing new demands.
According to PUCT, about 60% of forecast demand to 2030 is to come from bitcoin mining and data centers, including those run for artificial intelligence. Projected hydrogen production facilities, as well as expansions and electrification of existing industries, also are forecast to sap power from the Texas grid.
According to PUCT, Texas has the nation’s fastest growing economy and the eighth-largest global economy. The state’s population today is estimated at around 30 million, but it could reach 50 million by 2050.
Although top officials said adding generation is a pressing issue, Texas lawmakers are unable to consider new legislation until the next session begins in January.
