Gas

Calpine proceeds with plan to build more natural gas plants in Texas

The company said a new 425 MW plant would be operational before the summer of 2026.
Calpine proceeds with plan to build more natural gas plants in Texas
(Calpine's Freestone Energy Center, a peaker plant in Texas. Photo by Calpine.)

Calpine announced it is relaunching an effort to build more natural gas-fired plants in Texas and is crediting recent actions by state regulators.

Earlier this year the Texas Public Utility Commission (PUC) adopted a Performance Credit Mechanism (PCM) designed to incentivize new generation. Essentially, power producers will sell credits to retail energy providers in Texas. The credits offer assurance to the providers that power will be available to them during times of scarcity, which under the old system would trigger higher prices.

Critics have said the PCM doesn’t offer assurance that these new power plants will indeed be built but instead simply gives more money to power producers.

We’ve reported previously on Calpine’s initial project, a 425 MW gas-fired plant adjacent to the existing Freestone Energy Center in Freestone County. Efforts already underway include engineering and site planning, grid interconnection requests and environmental permitting. Calpine said gas turbine and generator components have been procured and are ready for deployment. The new facility would be operational before the summer of 2026.

Other projects under development by Calpine include a 425 MW gas-fired plant near the Guadalupe Energy Center in Guadalupe County. Permitting and interconnection efforts are underway.

Calpine would also develop a new large-scale combined cycle plant to support co-located industrial load as well as the electrical grid.

The company said it also hopes to develop generation projects equipped with carbon capture.

Earlier this month the Texas Senate approved two major bills aimed at building more natural gas-fired plants in the state. As much as 10 GW of these plants could be built if SB 6 is signed into law.

SB 7 would create a financial incentive to encourage the private development of energy generation resources that can come on within two hours and run for at least four hours, such as natural gas plants or batteries. 

The goal of the bills, according to the sponsors, is to prevent another catastrophic power shortage like the one that killed more than 200 people in 2021 as freezing temperatures knocked power production offline and left millions of Texans in the dark.

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