Texas Might Have To Build Gas Power Plants Themselves If Investors Don’t Says Lt Gov Dan Patrick
Last week in Houston, Texas, state politicians and energy sector leaders pitched to approximately 100 investors, representing around $2.2 trillion in capital, the idea of expanding the state’s natural gas power plant infrastructure.
The energy investment summit, hosted by investment firm BlackRock Inc., the world’s largest money manager, aimed to encourage the development of additional natural gas-fueled power plants to bolster Texas’ energy grid.
Lieutenant Governor Dan Patrick emphasized the urgency of attracting private investment for this initiative, suggesting that the state might step in to build these facilities itself if necessary.
The state’s objective is to enhance its power generation capacity by 10 gigawatts, sufficient to supply electricity to 2 million homes during peak demand periods.
This effort is part of a broader strategy to stabilize the Texas energy grid, which has faced significant challenges, especially in the wake of a catastrophic winter storm three years ago. That event highlighted the grid’s vulnerabilities, leaving millions without power and resulting in over 200 fatalities. The repercussions of the disaster have had a lasting impact on Texans, with the financial burden of recovery expected to extend over two decades.
To support the development of natural gas infrastructure, Texas officials have proposed the Texas Energy Fund, a $10 billion initiative aimed at providing low-interest loans to developers. Despite the state’s “free-market” approach, Patrick acknowledged the possibility of direct state involvement in building power plants as a last resort to ensure grid reliability.
“If we can’t get an incentive program to attract investors to build, then the state would have to build ourselves and then subcontract out for someone else to run it,” Patrick said to the media after his opening remarks. “We can’t sit and do nothing.”
The push for more natural gas plants is part of Texas’ broader energy strategy, focusing on “dispatchable generation” to complement renewable energy sources. This approach aims to provide a more reliable and flexible power supply, capable of responding quickly to fluctuations in demand and supporting the integration of renewable resources.
Following the approval of a $5 billion state fund by Texas voters, the state is poised to offer financial incentives designed to spur investment in the energy sector and build more resilient power infrastructure.
The summit also saw Patrick amicably sharing the stage with BlackRock CEO Larry Fink after the state blacklisted the asset manager for its ESG leanings. Patrick, a conservative, praised Fink and said that he reached out to him and they had met two times since the blacklisting. They came up with the idea of the summit at the later meeting.
“I don’t know what I expected from the king of Wall Street, but we kind of hit it off immediately,” Patrick said.
Information for this story was found via Bloomberg, Reuters, Houston Chronicle, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
