Filings Support 41 GW of New Gas-Fired Generation Across Texas

Texas' plan to add more natural gas-fired power generation capacity, supported by money from a newly created energy fund, received a boost when several companies announced their intention to file applications to build new facilities under the program. Vistra on May 30 said it plans to add as much as 2 GW of gas-fired generation capacity in the state, joining several other developers who have said they would likely ask state regulators for financial support through the Texas Energy Fund (TEF). Texas voters in November of last year authorized the program, and lawmakers have appropriated $5 billion for the fund, which through its In-ERCOT Generation Loan Program will provide low-interest loans to finance new construction or upgrades to existing dispatchable electric generating facilities within the Electric Reliability Council of Texas (ERCOT) region. There was a May 31 deadline for projects to notify officials of their intent to apply for loans, and the state's utility commission said filings representing more than 41 GW of new gas-fired generation capacity have been recorded. Full applications for project funding are due July 27. The Public Utility Commission of Texas (PUCT) on June 1 said the agency had received 125 notices of intent to apply for a loan through the In-ERCOT Generation Loan Program. The PUCT said the notices request $38.9 billion in financing for almost 56 GW of proposed dispatchable power generation projects across ERCOT. "To ensure reliable, affordable electricity for the growing number of homes and businesses in Texas, we need more on-demand, dispatchable power generation," said PUCT Chairman Thomas Gleeson. "Seeing such a strong initial response from industry to the In-ERCOT Loan Program is an encouraging sign that the Texas Energy Fund will be an effective tool and incentivize the investment needed to bring more on-demand power to the state." To be eligible for a loan, the project must add a minimum of 100 MW of new generation to the ERCOT grid. The loan may finance up to 60% of the cost of the project. "Since Winter Storm Uri in 2021, I have been abundantly clear that we must bring new dispatchable generation [primarily new natural gas plants] to Texas to ensure we maintain reliable power under any circumstance," said Texas Lt. Gov. Dan Patrick in a statement on May 31. "As of this morning, 81 applicants representing over 41 gigawatts of dispatchable power generation projects have applied for the competitive low-interest loan program provided through the Texas Energy Fund [TEF] to keep up with our growing state. The TEF will provide grants and low-interest loans to finance the construction, maintenance, modernization, and operation of electric facilities in Texas. It also provides a completion bonus to expedite the building of these plants. We need more natural gas plants in the ground as soon as we can get them."

Largest Gas-Fired Projects

The largest gas-fired project unveiled to date is the FGE Eagles Pines facility, in Cherokee County, a combined-cycle power plant developed by Austin, Texas-based FGE Power that when complete would feature three 1,150-MW units. GE Vernova and Massachusetts-based Competitive Power Ventures (CPV) have said they plan to build CPV Basin Ranch, a 1,350-MW gas-fired plant near Barstow. Other companies with announced projects include ENGIE North America, which has proposed a 483-MW Spenser peaking plant that would initially be fueled with natural gas, and eventually transition to burn hydrogen. Vistra Energy on May 30 said it would apply for TEF loans for as much as 860 MW of capacity from advanced simple-cycle peaker plants. Those facilities would be built in West Texas “to support the increasing power needs of the region, including the state's growing oil and gas industry," according to the company. Vistra also announced it would convert the coal-fired Coleto Creek Power Plant near Goliad to burn natural gas. Coleto Creek is scheduled to retire in 2027. The company said the facility would be repowered with natural gas, with generation capacity of as much as 600 MW. The company also said other projects at its existing gas-fired facilities would add more than 500 MW of summer generation capacity, and 100 MW of winter capacity. Vistra said about half of the new capacity would be online this summer, with the rest entering operation by summer 2025. "Vistra is committed to providing reliable and affordable electricity to our customers while decarbonizing our generation fleet at a responsible pace. Texas is in the enviable position of experiencing sustained economic growth, which includes rapidly increasing power demand as a result of population growth and electrification activities in a number of areas, including transportation, data centers, manufacturing, and industrial activities," said Jim Burke, president and CEO of Vistra. "Texas policymakers are implementing several enhancements to our competitive, energy-only electricity market to incentivize construction of much-needed dispatchable generation, and gas plants are able to meet that need. Based on these market enhancements, Vistra is pleased to announce our investment to bring approximately 2,000 MW of dispatchable power generation to the ERCOT grid, and we look forward to being part of the solution as our industry strives to meet the growing power needs of Texas." Vistra, the largest electricity generator in Texas, currently operates about 11.3 GW of gas-fired power plants across the state. —Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).