As the Public Utility Commission weights options for redesigning the Texas power market, power plant generators say a new design is needed to incentivize building new projects within the state.
that contributed to the energy disaster in 2021, and develop a long-term reliability standard that ensures the grid holds during periods of low non-dispatchable energy, such as wind and solar power.
That means incentivizing investment in new dispatchable generation, like natural gas-fired power plants, to come online in Texas in order to replace aging infrastructure, PUC CommissionerAs it prepares to make a policy recommendation to the 88th Texas Legislature later this month, the PUC is working through how the long-term power market design should function.
The PUC retained a third-party consulting firm, E3, to craft a report considering the options and to make its own recommendations for ERCOT market design reform. Those recommendations, as well as separate recommendations from PUC staff,PUC staff, Lake and other commissioners have recommended a so-called Performance Credit Mechanism design, which would give power generators performance credits based on their availability to the electric grid during hours of highest risk.
Because of fewer opportunities to finance building new generations in ERCOT, some developers have chosen to take new projects to other areas of the U.S. where they could be guaranteed better returns. But power plant developers said incentives, like performance credits under the PCM design, could spur more investment in new dispatchable generation in ERCOT.
"What we see is that, in ERCOT, the amount that you can borrow to make a new investment is generally lower than you can in other markets," said
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