Texas' $10 Billion in T&D Projects to Aid Strained Power Grid

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Researched by Industrial Info Resources (Sugar Land, Texas)--Texas's combined wind and solar generating capacity is expected to double by 2035, according to the U.S. Energy Information Administration (EIA), but there's a catch: The Lone Star State's transmission and distribution (T&D) system is sorely in need of upgrades to accommodate these resources when they are at peak production. Otherwise, the state is forced to curtail wind and solar production to maintain a balance between electricity supply and demand. Industrial Info is tracking nearly $10 billion worth of active and planned T&D projects across Texas, although more than half of that total is attributed to projects with a low probability (69% or less) of kicking off as planned.

Click on the image at right for a graph detailing the top parent companies for T&D projects across Texas, by total investment value.

Natural gas and coal accounted for 61% of Texas' energy use in 2021, according to the Electric Reliability Council of Texas (ERCOT), the grid manager for most of Texas, while nuclear accounted for 10%. Wind and solar accounted for about 28%, but when their energy supply outpaces demand during weaker periods of use, grid operators have to curtail wind and solar generation to keep the grid balanced, according to the EIA.

In 2022, ERCOT curtailed 5% of its total available wind generation and 9% of total available utility-scale solar generation. The EIA projects ERCOT could be forced to curtail as much as 13% of wind generation and 19% of solar by 2035, if no significant upgrades are made to the Texas grid.

The Permian Basin, one of the busiest energy hotspots in the U.S., is of particular concern when it comes to grid reliability issues. Wind Energy Transmission Texas LLC (Austin, Texas) began construction last year on an $83 million transmission line from the Bearkat Substation in Garden City to the Longshore Substation in Big Spring, which is about 40 miles east of Midland, near the heart of the Permian. The 27-mile, 345-kilovolt (kV) overhead line is expected to be finished toward the end of the year. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can learn more from a detailed project report.

American Electric Power Company Incorporated (NASDAQ:AEP) (AEP) (Columbus, Ohio) announced earlier this year it would shift its focus to its core regulated utility operations, which include more renewable investments and upgrades to major transmission systems. AEP is at work on a $52 million rebuild of transmission line from Sterling City to San Angelo, which covers about 32 miles within the Permian Basin area. It is expected to wrap up next spring. Subscribers can learn more from Industrial Info's detailed project report, and read about AEP's T&D plans in Industrial Info's May 10, 2023, article - AEP Sheds Non-Core Assets, Focuses on Renewable, T&D Growth.

The EIA noted that about 64% of the wind and solar curtailments in its analysis happened during periods of weak demand. One factor that could boost demand--and thus reduce curtailments--during such times is battery energy-storage system (BESS) charging, which would store power that could be dispatched to the grid during periods of higher demand. Texas accounted for nearly 70% of utility-scale battery additions in the U.S. in the first three months of 2023.

Among the BESS projects being developed to support the Texas T&D system is Broad Reach Power LLC's (Houston) $85 million BRP Antlia BESS near Del Rio, which is expected to have a capacity of almost 71 megawatts (MW). Construction is expected to wrap up toward the end of the year. CenterPoint Energy Incorporated (NYSE:CNP) (Houston, Texas) is seeking permits for a 206-MW BESS at its Oasis Substation in Alvin, which could begin construction toward the end of 2024. Subscribers can read detailed reports on the Del Rio and Alvin projects.

Subscribers to Industrial Info's GMI project and plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for active and planned T&D projects across Texas.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).