Panel 1: Managing Texas Sized Growth

1.1 Jimmy Glotfelty, PUCT

• The Governor requested the PUCT to identify barriers to developing advanced nuclear plants in Texas.
• A task force has held numerous meetings on the topic, with information filed under docket number 55421.
• A report with recommendations is expected soon, addressing market design, siting, safety, and other challenges.
• Globally, only China is actively building new nuclear plants; U.S. efforts have been limited.
• New nuclear technologies are emerging, such as smaller, safer, and less expensive SMRs.
• Texas has potential for nuclear expansion with existing plants at Comanche Peak and the South Texas Project.
• Research reactors at Texas A&M and the University of Texas are educating engineers on nuclear challenges.
• Licensing by the Nuclear Regulatory Commission remains a significant hurdle.
• Texas has uranium mining and medical isotope usage, positioning it as a leader in nuclear potential.
• Several new projects in Texas include Natura at Abilene Christian and Dow Chemical-X Energy in Seadrift.
• Industry challenges include bridging gaps between licensing, construction, and operation, and managing initial high costs.
• Financial strategies and state policy direction will be necessary, particularly concerning nuclear waste and recycling.
• The goal is for Texas to lead in nuclear technology fabrication, drawing on oil and gas expertise.
• The report will outline financial incentives and policy considerations for advancing nuclear development in Texas.

1.1: Barry Smitherman, TxGEA

• TxGEA includes major oil and gas companies, utilities, and startup geothermal energy companies.
• Texas has significant geothermal resources, especially in the valley, along the coast, and around major cities like Houston, Dallas, and El Paso.
• TxGEA began in 2021 following Winter Storm Uri to promote 24/7 low carbon energy.
• Three senate bills (SB 785, 786, and 1210) were introduced to clarify heat ownership and support geothermal companies.
• Sage Geosystems announced a 3MW sustainable geothermal energy system to be operational soon.
• Sage is collaborating with the Department of Defense for power projects at military bases in Texas.
• Sage also partnered with Meta Platforms to supply clean geothermal power to technology centers.
• There are ongoing geothermal projects in Presidio County for reliability improvements.
• The US Department of Energy projects up to 90 gigawatts of geothermal power in the US by 2050.

1.1 – Doug Robinson, Natura Resources

• Doug Robinson is the founder and president of Natura Resources, with extensive experience in the Permian Basin and gubernatorial appointments on energy in Texas.
• In 2020, Natura Resources started a project to develop and deploy molten salt reactors, forming the Natura Resources Research Alliance with multiple universities.
• Recently received a construction permit from the NRC for the first liquid-fueled, advanced research reactor in the U.S. in 40 years.
• The project has supported the education of hundreds of undergraduate and graduate students across four universities.
• Privately funded with over 80 Texas-based investors, the project has achieved significant milestones independent of federal funding.
• Opened a $25 million Science Engineering Research Center, the first advanced reactor facility outside a national lab in the U.S.
• Formed a partnership with the Texas Produced Water Association for potential reactor deployment in the Permian to desalinate water and provide power.
• Conducting studies on integrating molten salt reactors with refineries to improve efficiency.
• Molten salt reactors use salt instead of water as a coolant, operate at high temperatures and low pressure, and have high burn efficiency with minimal waste.
• These reactors can also produce valuable medical isotopes for cancer treatment and imaging.

1.1: Mark Stover, TSPA

• Mark Stover introduced himself as the Executive Director of the Texas Solar Power Association (TSPA) and discussed the growth of solar power and energy storage resources.
• Battery storage is the second fastest-growing technology on the ERCOT grid. There are currently 9,000 MW installed, with an anticipated increase of 11,000 MW by 2025.
• Battery storage is highlighted as a quick-response and flexible technology, efficient in shifting grid conditions and addressing congestion issues.
• Early energy storage mainly featured 1-hour duration technologies, but now there are projects with durations up to four hours and potential for multi-day durations with new technologies.
• Various battery chemistries, including iron-air batteries, are expected to emerge, alongside existing lithium-ion batteries.
• A technology-neutral policy approach is advocated to let competition foster innovation, ultimately benefiting Texas consumers.
• Advanced nuclear technologies are anticipated for the 2030s and beyond, with NRC working on reducing permitting timeframes.
• There are regulatory challenges with deploying nuclear technology but improvements in licensing process are underway.
• Geothermal energy potential in Texas is promising due to existing oil and gas infrastructure and fast permitting processes.
• Geothermal technology is relatively simple and expected to reach substantial capacity by 2030.
• The timeline for extended life battery technologies is within the next five years, with an expected reduction in costs and improvements in efficiencies.
• Economics of geothermal energy are improving, with a goal to be competitive in the ERCOT wholesale market.
• Faster interconnections to the grid and supportive state and federal policies are needed for technological deployments.
• Universities in Texas are playing a significant role in research and development in geothermal and nuclear energy.

1.1: Questions for Mark Stover

• The future for solar power in Texas is promising, with significant growth in utility-scale solar capacity over the past four years.
• Current solar capacity on the grid is about 26,000 MW, with an additional 27,000 MW in late-stage development.
• Approximately 60% to 70% of late-stage projects typically reach completion, indicating substantial further growth in solar capacity soon.
• A technology-neutral approach is preferred, allowing market-driven innovation and competition.
• Mention of energy storage being increasingly added to solar projects to enhance dispatchability and operational flexibility.
• Standalone energy storage projects are also being pursued by some members.
• Offer to discuss more detailed topics related to technology drivers and other aspects offline.
• Additional resources like TCEQ are available for discussing topics such as emissions and nuclear waste.

1.1:Questions for Doug Robinson, Natura Resources

• Doug Robinson discussed that the molten salt reactor would produce 100 megawatts of electricity.
• It was clarified that there is almost no waste with molten salt reactors.
• In liquid fuel reactors, fuel and salt can be drained and used in a new core reactor vessel, extending the reactor’s lifespan.
• The salt in the reactors acts as a heat transfer fluid, not as a fuel source.
• Maintaining the cleanliness of the salt by keeping oxygen out is crucial to prevent corrosion and ensure longevity.
• The reactor at Abilene Christian will only require a single fueling, with no need for further refueling.

1.1: Questions for Jimmy Glotfelty

• The discussion focused on the use of light water reactors in military vs. civilian applications.
• Military reactors use higher uranium enrichment levels (~90%) compared to civilian reactors (<19%).
• Proliferation concerns limit civilian use of high enrichment uranium.
• The Department of Defense is exploring small modular reactor technologies for reliability.
• Dow is working with X-energy on a project in Seadrift, Texas, involving modular reactor technology.
• The project involves four units of X-energy reactors: three for steam and one for electricity, aiming for 400 MW.
• Dow’s project aims to replace an old cogeneration plant and could be replicated globally.
• Senator Kolkhorst expressed excitement about the project’s development in Senate District 18.

1.1: Questions for Mark Stover

• Battery storage projects are proliferating, with standalone assets and co-located activities.
• There is a greater number of standalone battery projects compared to co-located ones.
• Drivers for battery projects include grid congestion solutions, energy arbitrage, and resource firming.
• Arbitrage involves charging batteries when demand and prices are low, and discharging them during high demand.
• Battery farms are located near interconnection points and are developing both in remote and urban areas.
• Permitting for battery farms follows local processes, including noise ordinances and fire safety codes.
• Counties express concerns over permitting, safety hazards, tax abatements, and the lack of regulation.
• Safety incidents involving battery storage are rare, with a low failure rate compared to industry growth.
• Concerns are raised regarding rural areas’ capability, especially volunteer fire departments, to handle battery fires.
• The lack of regulation and oversight for battery storage projects compared to other energy projects is highlighted.
• The growth of disseminated battery storage facilities of the 1 MW variety is discussed, illustrating their widespread and varied deployment.

1.1: Questions for Barry Smitherman

• Discussion on geothermal storage operations using a sequence of wells for energy storage.
• Pilot project results: one well can produce 200 kW for 18 hours and 1 MW for 30 minutes utilizing the earth’s heat.
• Potential of using earth pressure and heat for long-term energy storage during shortages.
• San Miguel project working on a 3 MW geothermal basis.
• Geothermal storage installations on small land areas, example of 10 wells on 15 acres.
• Mention of turbines installed within the 15-acre geothermal site.
• Comparison of land usage and power density with nuclear technologies, noting nuclear’s efficiency.
• Acknowledgment of oil and gas industry’s influence on power technology advancements.
• Speculation on future energy landscapes including the potential of MSRs to reduce the necessity for batteries in energy storage.

• Discussion about creating a fund for abandoned battery projects similar to the orphan well program to prevent community burden.
• Concerns raised about battery storage impacting groundwater and how these projects are perceived as gaming the system.
• Discussion about battery farms not necessarily creating more energy but used for storing excess energy to sell later for higher prices.
• Concerns regarding the potential risk of fires in battery storage projects and the burden on local fire departments.
• Acknowledgment of existing decommissioning laws for wind and solar projects in Texas and the potential for similar laws for battery storage in future.
• Discussion about lifecycle management for battery storage and how it could mirror wind and solar decommissioning laws.
• Interest in continuing lifecycle conversations regarding battery storage before the next legislative session.
• Exploration of geothermal energy technologies and how they measure and manage resources efficiently using different water methods.
• Acknowledgment of clean and reliable energy future for Texas through diverse energy sources.
• Reference to Senate Bill 1290 mandating TCEQ to study battery storage effects, revealing ongoing evaluations.
• Discussion on protections for landowners in battery storage projects, with current practices and potential statutory changes mentioned.

1.1: Questions for Barry Smitherman Cont.

• Barry Smitherman discussed production costs of geothermal electricity, which are currently high.
• There is uncertainty in estimating geothermal production costs compared to wind, solar, or natural gas.
• Geothermal efficiency is relatively high with current turbine technology and steam reclamation.
• Today, geothermal is too expensive for merchant operations and likely to partner with co-ops, municipalities, and the federal government.
• Consideration of a price factor on energy reliability, which isn’t currently implemented.
• Use of non-potable water for replenishing geothermal hot rocks helps reduce water usage.
• Potential reduction in capital costs over time could make geothermal more economical, similar to nuclear plants.
• Comparison to Iceland and California, where geothermal is cheaper due to surface heat, unlike Texas where drilling costs are significant.
• Advancements in drilling technology are continuously reducing costs and time.

1.1: Questions for Mark Stover

• Counties with populations of 250,000 or more must adopt certain regulations, such as fire codes.
• These regulations are often influenced by international or national standards.
• Requirements include permitting processes related to fire safety, noise, and road use agreements.
• Differences exist between solar facility and battery storage regulations.
• Options for financial security in solar and wind farms include surety bonds, letters of credit, or investment grade ratings.
• The security mechanism choice is often driven by landowner preferences.
• Legislation and requirements for battery farms are still being developed.
• Questions about decommissioning of renewable resources, like old wind turbines, reflect ongoing environmental concerns.
• Texas leads the nation in solar and wind energy production and is nearing leadership in battery storage.
• Ongoing studies and legislative efforts aim to address various issues related to renewable energy infrastructure.

1.1: Questions for Doug Robinson / Jimmy Glotfelty

• Discussion on molten salt reactors and their benefits, including no water usage and potential for industrial heat use.
• Partnership with Texas produced water consortium for desalinization and water management, particularly in the Permian region.
• Challenges in battery backup systems’ runtime and their potential to extend discharge periods from 1 to 4 hours.
• Discussion on firming requirements and grid reliability, with considerations of battery usage for cooling and climate control.
• Analysis of the resource mix and energy capacity in Texas, including the impact of renewable energy sources like wind and solar.
• Emphasis on future planning for Texas to potentially export power to other states and the need for infrastructure to support that.
• Dialogue on the reliability factor’s economic value for Texas’ generation fleet.
• Importance of maintaining a diversified fuel mix to avoid over-reliance on a single energy source.
• Consideration of environmental and economic implications of renewable energy sources such as solar panel and battery lifecycles.
• Discussion on the ratio of intermittent to dispatchable energy sources needed for a reliable grid.

1.2 – Panel 2: Managing Texas Sized Growth

1.2: Pablo Vegas, ERCOT

• Pablo Vegas is the President and CEO of ERCOT.
• ERCOT is focusing on managing Texas’s rapid growth and unique challenges with large loads and ensuring grid reliability through transmission planning.
• Texas’s electricity demand is rising due to population and economic growth, particularly from industries like data centers.
• Data centers have a persistent, non-price-responsive electricity load and typically have extensive on-site backup power.
• ERCOT is updating forecasting models to keep pace with load growth and incorporating House Bill 5066 requirements.
• House Bill 5066 changes transmission planning by requiring more comprehensive load forecasts and attestation from transmission service providers.
• The summer peak load forecasts from 2024 to 2030 show significant growth, especially due to officer-attested forecasts.
• Developing high voltage transmission will enhance flexibility in power distribution and improve electricity line loss efficiency.
• Plans aim to address congestion costs due to transmission constraints, reducing costs for consumers.
• Stakeholder input will be necessary before finalizing high voltage transmission strategies.

1.2: Haynes Strader, Skybox

• Haynes Strader is the Chief Development Officer for Skybox Data Centers, a major data center developer, operator, and owner in Texas.
• Skybox operates a 1400 megawatt pipeline, with largely 1000 megawatts in Texas.
• Key active locations include northeast Austin, Pflugerville, Hutto, Katy, South Dallas, and Lancaster.
• Skybox differentiates from cryptocurrency mining, focusing on critical internet infrastructure.
• Data centers are crucial for the internet, economy, and new technologies like AI.
• Reliability on the electric grid is paramount for data center site selection.
• Data centers represent significant long-term investments, with leases typically spanning 15 years.
• Texas data centers employ around 60,000 direct employees, with additional indirect job creation.
• The partnership with utilities is vital, requiring collaboration to avoid being a grid problem.
• Suggestions for improving the queue process include requiring engineering deposits and dynamic load modeling.
• Data centers take a similar amount of time to build as natural gas plants, offering a chance to increase Texas’s baseload.
• Skybox aims to align with Texas in leading global data center and energy development.

1.2: Todd Staples, TXOGA

• Todd Staples represents the Texas Oil and Gas Association, whose members produce 90% of Texas’s crude oil and natural gas.
• Thanks ERCOT for their leadership in managing Texas’s electricity generation and transmission needs.
• Acknowledges House Bill 5066 as a bold step in improving application times for new transmission facilities and focusing on underserved areas.
• Commends the adoption of the Permian Basin reliability plan by the PUC.
• Supports an optionality approach for 345 kv implementation, allowing data collection and legislative review.
• Stresses importance of ensuring Texas remains open for business and encourages new technologies and developments in Texas.
• Advocates for advanced planning with Transmission Service Providers (TSPs) for new technologies.
• Notes industry conducted evaluations for the Permian Basin’s transmission and electricity generation needs, aiding House Bill 5066’s passage.
• Recommends assessing financial assurance for new technology entrants based on load demand, investment level, employment, and power contribution.
• Expresses concern that excessive changes in Texas’s electricity market rules may deter investment.
• Supports Texas’s model for spreading new transmission costs across users according to usage.
• On demand-side response programs, stresses the need for scrutinizing their actual grid reliability and market efficiency contributions.
• Proposes frequent reviews of ERCOT’s forecasting methodology and ancillary services for increased transparency.

1.2: Mark Bell, AECT

• Mark Bell represented AECT, highlighting the growth in electric demand due to new large electric consumers wanting to connect to the Texas grid.
• Legislation in 2021 and 2023 revised how electric growth is evaluated, aligning with industry observations of increased interconnection requests.
• Utilities report hundreds of interconnection requests across various sectors, many exceeding 1 GW of load.
• Texas, with its business-friendly environment and competitive electricity market, attracts data centers, semiconductors, and industrial projects.
• ERCOT’s innovative approach reduces interconnection wait times compared to other ISOs, making Texas appealing for data centers and large consumers.
• The state has competitive electricity rates, with data showing Texas having the 6th best industrial rates in the U.S., and the lowest among large states.
• Coordination and collaboration are emphasized to integrate growth reliably and affordably into the electric system.
• Data centers require robust transmission capacity and offer long-term power purchase agreements, supporting other industries.
• Growth is also seen in hydrogen, LNG, industrial sectors, and oil and gas electrification.
• Current load growth projections signal necessary investments in transmission and generation, with the industry committed to powering Texas’ economic engine.

1.2: Questions for Haynes Strader

• Discussion on the predicted demand increase for data centers in Texas over the next six years, with a focus on whether the demand will reach the projected 30 gigawatts.
• Haynes Strader notes global demand is high but emphasizes the importance of distinguishing between good credit customers and startups.
• Reference to McKinsey’s updated study showing U.S. data center load could increase from 25 to 85 gigawatts nationwide, implicating significant growth potential for Texas.
• Data centers related to Skybox are operational 24/7 and have Triple-A credit industries, mainly participating in emergency demand response programs.
• Mention of diesel generators being used during emergencies, such as during URI, due to their reliability over natural gas.
• Discussion on regulatory challenges with TCEQ regarding air permits for generators used during emergency demand response.
• Ongoing dialogues between data center industries, TCEQ, and ERCOT to address scaling demand response practices and regulations.

1.2: Questions for Todd Staples

• Discussion on future energy demand, including data centers, crypto, hydrogen, industrial, oil, and gas sectors.
• Oil and gas remain vital; electrification in West Texas is a small fraction of overall demand.
• Hydrogen development is promising but uncertain due to unresolved federal subsidies and economic incentives.
• Concerns over infrastructure readiness and ratepayer costs associated with transmission projects.
• Focus on strategically improving infrastructure connectivity within Texas, particularly along the coast and West Texas.
• Need for investment in high voltage lines to support economic growth in Texas, currently lagging in adoption.
• Opportunity for Texas to lead in high voltage transmission, enhancing efficiency and reducing environmental impact.

1.2: Questions for Mark Bell

• Discussion on the uniformity and validity of forecasting methodologies among TDU companies like Oncor, AEP, and CenterPoint, acknowledging that while processes are similar, they are not identical.
• Emphasis on substantial growth in interconnection requests and the need to streamline processes, with several companies keen to interconnect.
• Lack of 765 high voltage lines in Texas, with discussions around the benefits and expediency of building infrastructure to support growth, especially in the Permian region.
• Cost concerns and addressing potential single points of failure and new technology risks with 765 kV lines, noting their long-term benefits and established technology.
• Shift in overall ownership cost projections, recognizing that initial investments in 765 kV lines are high, but cost-efficient in the long term.
• Potential resiliency benefits of a more robust high-voltage network, particularly against extreme weather events, emphasizing the reduction of power loss and congestion.
• Interest toward understanding and quantifying the benefits and costs of migrating to a 765 kV system to inform investment decisions.
• Discussion on the spread of transmission costs using the ‘postage stamp’ methodology, with considerations of fairness across different user demographics like senior citizens versus high-consumption industries.
• Concerns raised about communication and unexpected future energy demands, urging proactive sharing of information to stay ahead of infrastructure needs.
• Advocacy for early planning and collaboration to manage substantial forecasted growth, highlighting the enabling role of TDUs and industry.
• Challenges with initial requests from TDU customers and proposed solutions including nominal financial requirements.
• Concerns over long-term energy usage forecasts, ensuring that incoming data centers and industrial growth are met with adequate and timely infrastructure.