AUSTIN, Texas — Just four weeks ago, Texans were warned that the grid might not handle the summer heat. That meant we could be left in the dark if demand for energy outweighed the state’s supply.
“On the hottest days of summer, there is no longer enough on-demand, dispatchable power generation to meet demand in the ERCOT system,” said Peter Lake, chairman of the Public Utility Commission of Texas (PUCT), on May 3.
But Wednesday, that messaging was flipped on its head. In a virtual press conference, Pablo Vegas, the CEO of the Electric Reliability Council of Texas (ERCOT), said we should be in the clear.
“We do believe that we have enough resources to operate the grid reliably this summer,” he said.
While Vegas now says he doesn’t expect much conservation notices this summer, one energy expert says “nothing’s changed” in the past four weeks to make the grid more able to withstand extreme weather this summer.
“We’re going to conserve our way into a real problem. We’re short of generation supply as it is. We need to be building supply,” said Ed Hirs, who’s an energy fellow at the University of Houston. “But there’s no leadership coming from the legislature or from the governor’s office on this.”
After the last legislative session, Gov. Greg Abbott said the grid was fixed. Since then, he and Lt. Gov. Dan Patrick have said there’s more work to do as Texas grows.
“We have to have the natural gas power. It’s the most important thing this session,” Lt. Gov. Patrick said Tuesday.
He said lawmakers passed a bill to reward companies to build new natural gas plants with 3% loans, completion bonuses, and tax abatements. He said interested parties have until the end of the year to opt in. Building a new power plant would take years, and Hirs says the deal isn’t enticing enough.
“The opportunity for that plant to actually return capital to the investor is going to diminish over time,” Hirs said. “Unless there’s some sort of guaranteed rate of return that’s offered to our plant owner, I don’t expect to see any being built.”
Vegas said there are more renewables and batteries coming onto the grid than fossil fuel plants. He said he needs to do more research on the legislation before commenting on how it could help make the grid more reliable.
“We’ll have to see, based on the results of the recent legislation, how those things change,” Vegas said. “And we’ll keep you all informed as we see new resources showing an interest, as well as actually starting to develop new facilities.”
Hirs remains unconvinced that the legislation will reward companies to build more fossil fuel power plants in Texas.
“We’ve got another 10 years to go before we can see, I think, a stable build-out of the ERCOT grid,” he said. “We’ve got lots of people moving to Texas, we have a huge amount of business coming to Texas, and our electricity infrastructure has not kept up.”