By , Staff Writer| Houston Chronicle| Vistra plans to build two new natural gas power plants in the Permian Basin in response to the oil and gas industry’s growing thirst for electricity and other growth in West Texas, the Dallas-area power generation company announced Monday.
The two new power plants have a combined capacity of 860 megawatts, which is sufficient to provide electricity for approximately 215,000 homes during peak usage hours. They’re expected to begin operating in 2028, according to Meranda Cohn, Vistra’s chief communications officer.
In total, Vistra expects the two projects to cost close to $950 million, Cohn said.
“Vistra’s bold investment in the Permian Basin will reinforce our state’s electric grid, spur jobs, and drive regional economic growth for years to come,” Gov. Greg Abbott said in the company’s Monday news release.
For years, oil and gas companies in West Texas have clamored for greater access to the grid. Powering their operations with electricity rather than diesel is cheaper and more efficient.
The Permian Basin could demand an additional 26 gigawatts of electricity by 2038, which is like adding another Houston and then some, according to forecasts last year from the Electric Reliability Council of Texas, the state’s power grid operator. Oil and gas electrification accounts for more than half of that expected growth.
State leaders, including Abbott, have repeatedly assured the state’s most powerful industry that more electricity is on the way to support its needs.
Last year, Abbott-appointed regulators approved an estimated $13 billion to $15 billion in new long-distance power lines to deliver more electricity to the Permian Basin. These costs will be spread out among all residents and businesses across Texas.
Now, the surge in electricity usage in the oil and gas industry is also helping state politicians fulfill one of their policy goals: Spurring more natural gas power plants for the Texas power grid.
In recent years, investment in fossil fuel power plants has lagged as renewable energy boomed. Texas leaders say more natural gas power plants are needed to provide electricity when renewable energy is limited for prolonged periods, such as during a winter freeze, even though battery arrays that store power for use during times of grid strain have also proliferated.
Companies building gas-fired power generation say wind and solar projects — which have no fuel costs and low operating costs — have depressed wholesale electricity prices, making it much less economic for them to build new power plants. Vistra’s Monday announcement could be a sign that growing demand for electricity, at least in West Texas, is starting to change the prospects for new projects.
“There’s debate as to how big that growth is going to be, but we’re confident that this is a good investment,” Vistra’s Cohn said.
STORY CREDIT: By , Staff Writer| Houston Chronicle| Claire Hao is a reporter at the Houston Chronicle covering the Texas power grid, the clean energy transition and other electricity-related topics.
