East Texas-based Navasota Energy plans to build natural-gas fired “peaking” units in Guadalupe and Wilson counties capable of quickly sending power to the Texas grid at times of heavy demand.
The peaking units will aid reliability of the grid for South Texas, Navasota President Dan Hudson said.
The plants will be able to crank out power in 10 minutes and thus serve as a backup when power plants trip off line or when power from renewables, such as wind, drops off, he said.
The peaking plants will each be able to generate 543 megawatts of power at a moment in time, or enough to send power to 500,000 homes. Navasota hasn’t disclosed its total investment in the plants, which also will include a peaking unit complex in Grayson County in North Texas.
The plants are expected to be completed in 2017, he said.
Each plant will create 50 to 75 jobs during the construction phase and four direct jobs at each plant.
The plants will employ the latest gas turbine emissions-control technology, making them among the cleanest natural-gas-fired plants in the country, Hudson said.
Magnolia-based Navasota also was motivated to invest in peaking units because the grid gets electricity from a “significant number of old steam plants that are 40-plus years old,” Hudson said. About 8 percent of the total capacity to the grid is expected to be retired by 2019, he said.
In early June, the Public Utility Commission gave electricity generators more incentive to build when it raised the wholesale electricity price cap to $7,000 per megawatt hour. The cap is the highest price at which power can be sold into the market at times of peak demand.
The cap is scheduled to go to $9,000 per megawatt hour in 2015.
Hudson said, though, that “we aren’t there to sell into the market when (the cap) is high like that. We’ll be working with customers to protect their risk.”
Hudson said he believes there are “many potential customers.”
Robbie Searcy, a spokeswoman for power-grid operator ERCOT, the Electric Reliability Council of Texas, said, “We need the most capacity during those times when consumer demand is high, which is the hottest hours of the hottest days of summer.
“At those times,” Searcy added, “we rely on those units that don’t necessarily run all the time year-round, but are available for times when demand is higher. Having additional capacity available in the ERCOT region is always helpful in ensuring that we can keep air-conditioners running during the hottest days of the year,” or during times of an extreme cold snap.
ERCOT forecasts about 68,000 megawatts of peak electricity demand this summer, just under the record high of 68,305 megawatts reached on Aug. 3, 2011.