Industrial growth will add pressure to Texas power grid, analysts say

Industrial expansion on the Houston Ship Channel and Texas shale plays will continue to push up electricity demand on the grid, according to a report issued Monday.

Several new petrochemical and refining projects on the Gulf Coast are expected to increase demand for electricity and natural gas, investment firm Tudor, Pickering, Holt & Co. wrote in a report that assesses Texas’ power market.

Several companies, including Exxon Mobil, BASF, LyondellBasell and Dow Chemical, have announced plans for new plants to come on line in the next couple of years, all of which are expected to create additional electricity demand.

High demand: Texas-sized power bills dwarf electricity use in other states

Texas grid planners have projected 3 percent growth in electricity demand through 2016. But the report’s authors — Brandon Blossman, director of coal and power research, and Neel Mitra, a vice president in power and utilities research  — believe that the increased industrial demand could push the percentage higher, noting that Texas planners had previously projected 4.2 percent growth through 2016.

Texas Commissioner Ken Anderson, however, says that the grid planners’ decrease in projected demand growth accurately reflects how increased electricity efficiency and moderate weather are offsetting the growth of industrial power demand. The modified forecasts by the Electric Reliability Council of Texas (ERCOT), which manages the grid, show a more modest growth, Anderson said.

“ERCOT has been overcasting by about one percent,” Anderson said. “The outlook for dire resource adequacy is wholly overstated.”

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