Home Business To secure Texas’ future, ERCOT Grid will need more of everything

To secure Texas’ future, ERCOT Grid will need more of everything

by SuperiorInvest

In their third inaugural address on Wednesday, Texas Gov. Greg Abbott and Lt. Gov. Dan Patrick both promised address the remaining issues that contribute to ongoing concerns about the reliability of the Texas electric grid.

“We all know there will be increased demand on the grid as Texas continues to grow,” Abbott said. “So this session, we’re going to build a grid that will power our state — not for the next four years, but for the next 40 years.” Speaking for himself, Patrick told the inauguration attendees gathered on the state capitol grounds that ensuring grid reliability is “the most important thing we can do” in this year’s legislative session.

Despite progress made by state officials and grid managers at the Electric Reliability Council of Texas (ERCOT) since February 2021, when more than 200 Texans died during days of power outages caused by deadly winter storm Uri, keeping those promises remains a challenge. .

In his speech, Abbott referred to reforms enacted in the immediate aftermath of the storm, noting that he “signed 14 bipartisan bills that fixed what’s wrong with our power grid…Since our reforms on both sides of the aisle, no Texan has lost power because of our grid.” “

This is all true and something to be proud of. Still, there’s still general agreement that more needs to be done, with a particular focus on implementing policies that will incentivize the building of better thermal capacity—in Texas, most likely natural gas generation—designed to increase reliability while serving as a critical backup resource in the event of an adverse weather.

To that end, Governor Abbott last week approved the overhaul the design of the system market, which would include the implementation of the performance credit mechanism (PCM). In response to this concept, various generators operating in Texas have committed to building up to 4 gigawatts of new thermal capacity. But 4 gigawatts is nowhere near enough to really solve the problem. More will be needed, and a Legislature armed with a record $32.7 billion budget surplus will have little excuse not to address that need.

Overall, a significant amount of new capacity has been added to the grid in the 23 months since the Big Freeze event, but most of it it consists of occasional and hard to predict wind and sun. While no Texans lost power due to blackouts during this December freeze, it remains clear that ERCOT officials still have a very difficult time accurately predicting demand and available generation capacity on days when the state experiences severe weather conditions. During one very cold December day modeling grid managers underrated nationwide demand by 10 gigawatts, causing ERCOT to narrowly avoid rolling blackout conditions.

Governor Abbott boasted about the state’s continued economic strength, which has been maintained throughout their tenure since 2014 despite the state’s rapid population growth. Noting that Texas’ population recently topped 30 million, Abbott said, “Our $2 trillion economy is now the ninth largest in the world. Texas is America’s number one producer of the food, fiber and fuel we use every day… Made in Texas is the most powerful brand in America and we use it to build the number one economy in the United States. “

But continued concerns about the adequacy of the grid and its ability to accommodate rapid economic growth into the future have begun to affect the state’s ability to attract companies and large new projects to locate within its borders, a condition California has long experienced. Manufacturers and other companies whose projects involve large energy demands prioritize security of supply when choosing a site.

Governor Abbott was careful to avoid portraying further grid reforms as any competition between the various generation sources in the state. This is a wise example that every member of the Texas Legislature should take to heart.

The truth is that Texas will need more of everything if it is to be able to sustain its growing population and economy for decades to come. While this means that the need for additional thermal capacity must be met, it also means that renewables—wind and solar—must also continue to grow, and the traditional political war between lawmakers favoring one source over another must be avoided.

For Texas to grow in the prosperous and sustainable manner it has enjoyed in recent years, it will need everything.

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