Released September 10, 2013 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Texas will add billions of dollars in transmission and grid reliability upgrade projects by the end of 2017, along with new generation capacity. But the state still will be hard-pressed to meet growing demand, according to the Electric Reliability Council of Texas (ERCOT) (Austin, Texas), which is the independent system operator that manages the flow of electrical power to more than 23 million customers in the state.
Industrial Info is tracking 27 natural gas-fired combustion turbine projects in Texas, representing almost 14,000 megawatts. More than $12 billion in projects are scheduled to begin construction between October 2013 and December 2015.
The electrical market in Texas is very competitive and has been hailed as one of the best in the U.S. However, several factors have posed challenges to developers:
The Public Utility Commission of Texas (PUCT) (Austin, Texas) and ERCOT are considering the implementation of an operating reserve demand curve, which would increase electrical prices more frequently during peak hours. This would create an incentive for residential customers to use less electricity during peak hours.
The anticipated shuttering of many coal-fired power plants across the country has opened up opportunities for new-build generation developers; over the next decade, the predominant energy source will be either natural gas-fired generation or renewable solar and wind generation.
A study sponsored by NRG Energy Incorporated (NYSE:NRG) (Houston, Texas), projects that Texas could suffer $14 billion in losses through power outages over the next five years if no changes are made to the current market-based electrical system. In the report, Texas would see spiking electrical prices and several rolling blackouts a year, compared with only three over the last three decades.
Industrial Info will closely follow any challenges and change to the current ERCOT market-based system, which could require modifications to address future electrical and grid reliability needs.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Industrial Info is tracking 27 natural gas-fired combustion turbine projects in Texas, representing almost 14,000 megawatts. More than $12 billion in projects are scheduled to begin construction between October 2013 and December 2015.
The electrical market in Texas is very competitive and has been hailed as one of the best in the U.S. However, several factors have posed challenges to developers:
- Hesitancy of power generators to enter into long-term power purchase agreements
- Lack of liquidity in the market
- Reluctance of lenders to provide financing to expensive power projects
- Effect of current and forthcoming regulatory changes aimed at power generators
- The lack of a capacity market
The Public Utility Commission of Texas (PUCT) (Austin, Texas) and ERCOT are considering the implementation of an operating reserve demand curve, which would increase electrical prices more frequently during peak hours. This would create an incentive for residential customers to use less electricity during peak hours.
The anticipated shuttering of many coal-fired power plants across the country has opened up opportunities for new-build generation developers; over the next decade, the predominant energy source will be either natural gas-fired generation or renewable solar and wind generation.
A study sponsored by NRG Energy Incorporated (NYSE:NRG) (Houston, Texas), projects that Texas could suffer $14 billion in losses through power outages over the next five years if no changes are made to the current market-based electrical system. In the report, Texas would see spiking electrical prices and several rolling blackouts a year, compared with only three over the last three decades.
Industrial Info will closely follow any challenges and change to the current ERCOT market-based system, which could require modifications to address future electrical and grid reliability needs.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
