Dive Insight:
Texas load growth forecasts are rising rapidly, and the interconnection queue for the Electric Reliability Council of Texas is brimming with solar and storage. In April, ERCOT had active generation interconnection requests totaling 346 GW, with solar representing 155 GW of the queue, followed by 141 GW of battery storage. Gas made up just 15 GW.
“We don’t think additional gas is needed — that is, if the solar-plus-storage goes forward and we really pay more attention to the demand side,” Reed said.
But lawmakers last year developed the TEF to incentivize new or expanded dispatchable electric generation facilities. The program rules allow for loans to cover 60% of project costs for at least 100 MW that can connect to the ERCOT grid before June 1, 2029.
ERCOT anticipates about 152 GW of new load by 2030.
“We need more natural gas plants in the ground as soon as we can get them,” Lieutenant Gov. Dan Patrick said in a statement Friday. He called the TEF response “overwhelming,” with 81 initial applicants.
“Our plan is to expand this program in the upcoming legislative session to keep up with our state’s incredible growth,” Patrick said. “The Senate and I will continue to fight for more dispatchable gas-fired generation available on the [ERCOT] grid. The TEF is a step in the right direction to guarantee our grid remains reliable.”
Among the projects indicating they will file a full application:
- FGE Power and FGE Power Management Corp. filed what may be the largest project, the 3,300 MW FGE Eagle Pines, a combined-cycle facility to be located in Cherokee County, Texas.
- Competitive Power Ventures and GE Vernova submitted a notice of intent for the 1,350 MW CPV Basin Ranch project.
- Pecos Power Generation would construct a 478-MW combined cycle power plant in Pecos, Texas, with plans for a second 478-MW plant to commence commercial operations 18 months after the first phase. “Substantial progress” has already been made to ensure the project can pass institutional underwriting and secure the equity funds required by TEF, the company said.
- Woodrock GenCo filed several projects, including for a new 210 MW power generation facility. The Texas A&M University system “has expressed interest in pursuing negotiations for development of this portfolio of assets,” the company said.
- ENGIE Flexible Generation NA proposed the 483-MW Spenser peaking power generation facility. “Initially fueled with natural gas, it is our ambition to transition this power generation facility to hydrogen as that market matures,” the company said.
Vistra Energy on Thursday indicated it would apply for TEF loans for up to 860 MW in advanced simple-cycle peaker plants to be located in West Texas “to support the increasing power needs of the region, including the state’s growing oil and gas industry.”
Along with the peakers, Vistra also announced a planned 600-MW coal-to-gas conversion at the Coleto Creek Power Plant in Goliad County, Texas, which is set to retire in 2027. Upgrades at other existing plants will add more than 500 MW of summer capacity and 100 MW of winter capacity, the company said added.
The company added a caveat, however: “Market certainty is required for investment,” it said.
Texas regulators are continuing to implement market reforms aimed at encouraging long-term investment and strengthening grid reliability, including new ancillary services, a performance credit mechanism and a reliability standard. The PCM will provide $1 billion in annual incentives for generators to be available during times of grid stress.
“In addition to ERCOT market design reforms, Vistra’s decision to move forward with these projects is contingent upon other various factors, including state and federal environmental regulations and long-term wholesale trends that continue to support gas generation,” the company said.
