ERCOT plans major transmission projects to serve booming energy industry in West Texas
ERCOT's service area. Credit: ERCOT
- January 11, 2019
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In 2017, the Electric Reliability Council of Texas, recommended a little over a billion dollars in transmission projects. In recent years, that’s been about the average spent to extend and reconstruct transmission throughout ERCOT, says Jeff Billo, who is in charge of transmission planning for the grid.
There was even more building the previous year, 2016, when nearly $2 billion was built. That was something of an outlier, as was 2013, when roughly $6 billion was invested. That major increase was largely the result of the state Public Utility Commission ordered 3,600 miles of new transmission to bring wind power from West Texas to load centers in the eastern part of the state.
The continued major investments in transmission in West Texas has been driven largely by increased load in the area, both from oil and gas in the Permian Basin and wind farms and solar power coming out of far West Texas.
Currently, the city of Lubbock is gearing up to transfer its MOU to the ERCOT grid by 2021, and the agency is recommending new transmission to the Panhandle.
In addition to serving what Billo describes as “reliability needs of the grid,” ERCOT must also ensure that transmission is built to serve the rapidly growing state’s “economic needs and congestion needs.”
“You certainly see throughout the rest of the state, the demand increasing,” he says. “When I talk to colleagues from around the country, (the growing demand) is somewhat surprising to them because there are a lot of areas that just aren’t growing as much.”
Load is growing gradually but surely in the state’s major urban centers: Dallas, Austin, San Antonio, Houston. El Paso is not a part of ERCOT.
At the end of 2017, an ERCOT memo outlined the growing need in Houston, the state’s largest city: “Demand growth and generation retirements continue to contribute to transmission congestion in the Houston area. The 345-kV Houston Import Project, endorsed in 2014 and scheduled for completion in spring 2018, will import more power from the north to serve growing needs in the Houston area.”
However, growth is rising fastest in the sparsely-populated Permian Basin due to the major energy industry activity there. Peak demand from ERCOT’s far west load grew by 15% last year, whereas growth for the rest of the grid has only averaged 1.7% per year over the last decade.
The population increase has not driven the load growth that one would have expected in the past, says Billo. Increased energy efficiency has led to lower consumption. Austin Energy, the municipally-owned utility that serves about 430,000 customers in the Austin area, has been a particularly shining example of lowering consumption through demand-management techniques. New buildings are also more energy-efficient.
“The relationship between population growth and the amount of energy consumed –– that relationship has changed over the last 10 years,” says Billo. But what impact that has had on the need for new transmission is hard to say, he says.
Systemwide, ERCOT has planned for $3.9 billion in transmission projects for 2019-20. Of that, about $966 million will be in far West Texas.
There’s also some big demand growth coming out of the Gulf of Mexico. At the end of 2017, ERCOT said that it needed to put in place significant new transmission in anticipation of a new liquified natural gas facility export terminal.
“Planned industrial facility additions, including the Freeport Liquefied Natural Gas facility, are expected to increase peak demand increase in the Freeport area from less than 800 MW in 2014 to nearly 2,300 MW by 2022. The Freeport Master Plan Project, endorsed by the ERCOT Board in December 2017, includes a new 345-kV line into the Freeport area. Short-term upgrades will occur by 2020, and the longterm improvements are expected to be in place by 2022.”
Correction: This article has been corrected. It previously incorrectly reported that load growth across ERCOT was 1.7% last year, whereas that is in fact the average annual growth rate over the past decade. Also, the Lubbock utility will be moving to ERCOT in 2021, not 2020.