The state fund intended to expand Texas’ power grid is likely to double to match demand for electricity that’s expected to increase by 100% over the next six years.
State officials will consider boosting the Texas Energy Fund from $5 billion to $10 billion, Gov. Greg Abbott and Lt. Gov. Dan Patrick announced in a joint statement.
The fund provides for a $5 billion low-interest loan program to incentivize building natural gas powerplants. Texas has already received notice of intent to apply for $39 billion in loans, making the program nearly eight times oversubscribed, Abbott and Patrick said.
“With the new projections for 2030, we will seek to expand the program to $10 billion to build more new plants as soon as possible,” Abbott and Patrick said. “The average plant will take three to four years to complete, and new transmission lines will take three to six years to complete.”
Companies have until July 27 to apply for a loan.
Abbott and Patrick’s statement followed an announcement by the state’s grid operator that the state’s electricity needs are expected to surge in the coming years.
Pablo Vegas, the CEO of the Electric Reliability Council of Texas, said the state may need 150,000 megawatts of power to power the state’s grid by 2030.
Texas typically has 85,000 megawatts of power available counting wind, solar, coal, nuclear and natural gas.
Voters approved the Texas Energy fund in November 2023 to offer low-interest loans to incentivize development of gas-fueled power plants following winter storms in 2021 that killed hundreds and left millions without power for multiple days.
The Texas Energy Fund makes 3% interest loans available to help construct gas-fueled power plants that are not dependent on the weather and that could power 20,000 homes or more.
The fund is also designed to pay out bonuses to companies that connect new gas-fueled plants to the main grid by June 2029 and offer grants for modernizing, weatherizing and managing vegetation growth around electricity infrastructure in Texas outside the main electricity market.
Photo by James Wainscoat on Unsplash
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