Texas Voters Approve $10 Billion Fund For Natural Gas Power Plants, Posing Challenges for Renewable Energy Growth

Approval of Proposition 7 expands Texas' grid capacity by providing 20-year, 3% interest loans for natural gas power plants, drawing criticism from environmentalists for potential setbacks to renewable energy advances.

Texas voters approved Proposition 7, allowing for the creation of a $10 billion state-managed energy fund to encourage new natural gas power plants. The measure also provides 20-year, low-interest loans at a 3% rate to support these ventures.
The fund, opposed by environmental groups, is intended to bolster the state's grid capacity in response to a perceived reliability crisis as Texas rapidly incorporates new wind and solar units. Critics argue this move tilts the balance against cheaper renewable energy sources and battery storage.
Due to the approved amendment, $7.2 billion of the total fund will be reserved for 'dispatchable power plants', which are likely to be powered by natural gas.
The $10 billion program will also allocate $1.8 billion to backup power or microgrid technology for critical facilities, enabling them to run during blackouts and setting the foundation for some facilities to potentially operate off-grid. Furthermore, $1 billion will fund transmission, distribution, and generation in areas of Texas not served by the ERCOT grid.
Questions remain regarding whether the loans will attract substantial new investment, given that gas plants are more expensive to operate and may not generate sufficient revenue on the electricity market.