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Texas' energy water nexus

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Texas is continually evaluating its options for dealing with the limitations of its electricity grid. The Texas Chamber of Commerce Energy Association is examining an additional layer of complexity -- the water energy nexus.

Texas is coming up short in terms of both water and energy, but the state's economy has fared better than many other parts of the country due to low taxes, business friendly regulations and a strong energy sector.

Regardless, Texas could find itself short on both electricity and water in the years to come. Very little new generating capacity has come online in recent years. Inexpensive electricity rates and tight capital markets have caused power producers to be skittish on the Texas market. At the same time, increasing demand for water and drought conditions have made water less abundant.

When new capacity is built, it will be mainly natural gas burning power plants. While not nearly as water intensive as coal burning plants, natural gas plants require a great deal of water to cool equipment during operations, adding additional strain to Texas' limited water resources.

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