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Power brownouts, record demand possible this summer in extreme scenarios, ERCOT projects

The grid operator says sufficient power exists to keep the lights on, but a combination of extreme heat, high demand and low generation could create shortfalls.

Update:
2 p.m. with information from Public Utility Commission Chairman Peter Lake and ERCOT CEO Pablo Vegas.

AUSTIN — Texans could face brownouts if record demand this summer causes extreme scenarios, the state’s power grid operator is projecting.

The Electric Reliability Council of Texas projected peak demand for the summer for 82,739 megawatts. The Texas grid broke records 11 times during extreme heat in 2022 with demand that topped out near 80,000 megawatts.

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The report projects the lights will stay on as long as the grid does not experience a confluence of extreme heat, low renewable energy output and widespread outages at fossil fuel plants.

This could have major political implications at the state Capitol as lawmakers debate numerous proposals that could increase residents’ electric bills, use taxpayer dollars to build fossil fuel plants or both.

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ERCOT CEO Pablo Vegas equated the grid’s demand challenges this summer to a car.

“It’s ready to run,” he said. “It’s going to be reliable. However, we’re asking it to go further without adding more reliable fuel.”

Last year, the grid saw several close calls that led ERCOT officials to call for people to conserve energy as power reserves plummeted. The grid operator’s 2022 Seasonal Assessment of Resource Adequacy demand report undershot what the peak demand would be.

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The all-time demand record topping 80,000 megawatts was broken for the first time July 20 last year. The seasonal report had estimated peak demand of 77,317 megawatts.

This summer’s modeling indicates a glut in weather-dependent renewable production would have a greater impact than ever on the grid, with it accounting for a drop of 10,000 megawatts, enough electricity to power 2 million homes.

For more than a decade, renewable energy has been thought of as a low-cost alternative for the Texas grid. But as the net capacity of dispatchable energy — coal, natural gas and nuclear power — has stagnated in the state for the past 15 years while the state’s population and economy have surged, wind and solar is no longer a bonus but required to keep the lights on.

Peter Lake, the chairman of the grid’s regulatory committee, called Texas’ reliance on wind turbines and solar farms a “new reality” for the state.

That means that the typical times of peak demand have shifted away from the evening hours when Texans typically use the most electricity after returning home from work and crank up their air conditioners.

The highest risk for the grid is now after the sun sets and solar energy comes offline.

“It’s still hot at 9 p.m.,” he said of summer months.

“We’re going into this summer, relying on wind and solar to keep the lights on in Texas on our hottest days,” Lake added.

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Lake spoke at a Thursday press conference along with Vegas.

The two simultaneously reassured Texans that the grid infrastructure was more reliable than ever, but that the state faces a threat of demand outpacing the supply of available electricity.

Vegas said it is urgent for Texas to encourage more investment into natural gas fired power plants.

Legislative fixes

A major push is underway in the Texas Senate to subsidize natural gas power plants in particular. Lt. Gov. Dan Patrick, who presides over the chamber, said he won’t let legislators go home until they can guarantee new steel in the ground.

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One Tuesday, Sen. Charles Schwertner, R-Georgetown, issued a proposal for a program that would use taxpayer dollars to finance and subsidize new natural gas power. The bill would create a no-interest loan program for private companies to build natural gas fired plants and then pay them roughly 10% of construction costs if completed before the end of 2026.

It’s the senator’s second proposal to use taxpayer money to put new steel in the ground for power plants. The Senate passed another bill he authored that would use at least $10 billion of taxpayer money to build a fleet of natural gas plants to be used as a “backup generator” for the power grid.

Texas’ largest electricity generator operators have opposed the plan as disruptive and have threatened to scrap plans for new natural gas plants if Schwertner’s bill becomes law. They are also lining up against another Schwertner bill that would place a market cap on the market design they prefer, which is the performance credit mechanism that was adopted by the Public Utility Commission in January.

The “backup generator” plan appears to have fizzled out in the Texas House, where Corpus Christi Rep. Todd Hunter has yet to hold a hearing on the Senate bill. Hunter and his office spokesman have not returned messages seeking comment on the bill’s fate.

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Lake, the chair of the Public Utility Commission, would not opine on the numerous ideas before the Legislature but did say the grid’s stability does rest on the shoulders of lawmakers and the governor.

“A lot of this depends on the outcome of the legislative session,” he said. “And that’s why the Legislature … the House and the Senate and the governor consider this a top priority.”