Texas is looking to increase its state fund to support the expansion of the power grid in anticipation of a significant rise in electricity demand in the coming years.
Gov. Greg Abbott and Lt. Gov. Dan Patrick have announced plans to increase the Texas Energy Fund from $5 billion to $10 billion. Voters approved the fund in November 2023 to provide low-interest loans to encourage the development of new gas-fueled power plants.
The announcement follows a recent prediction by the state’s main grid operator, indicating a significant increase in electricity demand in the upcoming years. According to the Electric Reliability Council of Texas, the state’s main power grid is projected to need almost twice as much power by 2030.
The numbers in the new forecast, as stated in a press release by Abbott and Patrick, indicate the need for a thorough review of all grid-related policies.
The state’s grid faced significant public and legislative scrutiny following a winter storm in 2021. This storm resulted in the grid’s operations being disrupted, leading to prolonged power outages in freezing temperatures. As a result, millions of Texans were left without lights or heat. There was a significant loss of life.
A $5 billion fund has been allocated by the Texas Energy Fund to provide 3% interest loans for the construction of gas-fueled power plants. These power plants are designed to be independent of weather conditions and have the capacity to power 20,000 homes or more as per Click2Hosuton.
The fund was created to provide incentives for companies to connect new gas-fueled plants to the main grid by June 2029. It also offers grants for modernizing, weatherizing, and managing vegetation growth around electricity infrastructure in Texas, outside of the main electricity market that serves about 90% of the state’s power needs.
According to Abbott and Patrick, the state has received notices of intent to apply for a staggering $39 billion in loans, which is nearly eight times the amount that was originally allocated. According to reports, it is estimated that the average plant will require a time frame of three to four years for completion. Additionally, the construction of new transmission lines is expected to take approximately three to six years.
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