TEMPLE, Texas —
Natural gas power plants make up 51% of available power on the Texas power grid. Not all plants are on at the same time, but they make up the majority of the power in the state.
Due to the growth of renewable energy however, with wind power at 26% of the available power, the market price for electricity can stay so low those natural gas plants may not want to turn on. At the same time, if there is little wind available, natural gas plants are key in supporting the grid.
The Public Utility Commission of Texas heard from several panels of experts, from ERCOT and other organizations and companies Thursday to learn more about how companies get paid and how to make the market more attractive to new gas power plants.
Unfortunately, there are a few barriers to getting new power plants.
"The goal is to have generators self-admit," PUC Chairman Peter Lake said. "Prices have to be high enough for them to make money running their generator at that time, and at that point they turn it on."
The primary time gas generators make money is during price spikes in the market. ERCOT has a tool called the Operating Reserve Demand Curve that provides added revenue for generation when power is scarce.
The problem Texas faces is that power companies often only generate profit in times of scarcity, and that's not enough to get more companies to join the state grid.
Temple Generation CEO Daniel Hudson and Texas Rep. Hugh Shine told 6 News last week there will soon not be enough capacity, and they are concerned the situation will get worse.
"We are not adding the capacity that we need to add and the state is growing. We've got a thousand people a day coming into the state, on the average, and the demand for power is continuing to grow," Shine said.
Shine said Texas doesn't provide enough incentive to build power plants because all prices are based on an indexed price that changes day-to-day, which is also known as an energy market. He said companies will build where they can get more consistent prices in other parts of the U.S.
"The investment side is key. If people are not willing to come into Texas and build gas generating plants, we are going to continue with the same situation," Shine said.
Hudson said just the planning stage to build a new natural gas plant can take more than two years, and more power will be needed in Texas.