Yesterday the Public Utility Commission announced the selection of the project proposals which will receive funding from the Texas Energy Fund. The Texas Energy Fund is public money set aside by SB2627 for the Public Utility Commission to issue loans to support construction of new power plants or the expansion of existing power plants.
SB2627 was passed in response to the Winter Storm Uri disaster, when multiple fossil fuel fired power plants went offline during a period of record demand, threatening the stability of the entire electrical grid. More than two hundred people died as a result of the storm, many because they lost electrical power and the ability to heat their homes.
The idea of SB2627 is to build more generation capacity as a means of securing the electrical grid during periods of high demand. The bill directs funds to be spent on “dispatchable generation,” which is defined as generation that is primarily under human control, rather than dependent on a variable energy source. This distinction excludes renewable generation from eligibility for Texas Energy Fund grants.
There are some concerns about the PUC’s announcement. First, the total of all the proposals chosen to move forward, $5.38B, is greater than the amount of money set aside by SB2627. Energy expert Doug Lewin also pointed out in his newsletter that the proposals chosen do not reflect the 18% of Texas Energy Fund money that was supposed to be directed to backup power systems designed to improve reliability.
Backup power systems include innovative grid systems, like microgrids, where power is generated and distributed on a small scale, improving reliability and reducing cost. HEB grocery stores already operate a system of microgrids for their stores, which allows them to stay open and operational after natural disasters and other interruptions to electrical power.
Microgrids are particularly well-suited to taking advantage of renewable generation, especially solar and battery power. This adds a layer of reliability because renewables do not rely on a fuel source that must be transported, either by pipeline or truck. The extreme cold temperatures and widespread ice that came with Winter Storm Uri caused disruptions in fuel supplies by shutting down pipeline operations and making roads impassable.
The ongoing conversation between officials at Centerpoint Energy and the Public Utility Commission regarding the response to Hurricane Beryl reveals additional questions about the wisdom of continuing to rely solely on building additional large fossil fuel generators as a means of stabilizing the electrical grid. The problem after Beryl wasn’t a loss of supply, it was a loss of transmission.
Beryl’s winds knocked down miles and miles of transmission lines and poles. Many were covered with trees and vegetation, meaning crews had to first remove tons of downed trees before they could begin to restore power. Microgrids place electrical generation close to electrical customers, so miles and miles of transmission lines are not required.
If the goal is to ensure Texans have access to electricity when they need it most, we need all solutions on the table.