Texas 2036 Energy Expansion Simulator

Texas 2036 views that Texas is in the middle of an energy expansion, where oil and gas will remain a part of the state’s energy portfolio between now and the year 2036 (and beyond) while additional sources are added to the state’s energy sector.  These other energy sources are likely to include hydrogen, geothermal, advanced nuclear technology, and, among others, battery storage. Texas 2036 is studying how the state’s energy expansion will contribute to the state’s economy, governmental revenues, and emissions reduction.  

Broadly, Texas 2036 is looking to collaboratively develop scenario models (models) and an interactive scenario planner (planner) that describe how the implementation of certain energy strategies would impact net energy yield, economic and job growth, state revenues, and overall emissions. Texas 2036 would use both the models and the planner with specific audiences, including the Texas Legislature, state agencies, state leadership offices, and allied interests, to inform and contribute to conversations about policy changes relating to the state’s energy sector.  In addition, Texas 2036 would make both the models and the planner available on its website for public use as part of its outreach and communications program.

Background of Texas 2036

Texas 2036 is a nonprofit organization building long-term, data-driven strategies to secure Texas’ prosperity through our state’s bicentennial and beyond. We offer non-partisan ideas and modern solutions that are grounded in research and data on issues that matter to all Texans. Central to this effort is the development of various research reports and interactive data products used to educate policymakers, business and community leaders, and everyday Texans about some of the biggest challenges facing our state and opportunities to address them. 

Examples of Texas 2036 research and data products developed in partnership with outside experts and vendors include: 

  • The Health Coverage Policy Explorer, an interactive policy tool modeling the expected impact of more than 500 policy combinations for expanding health coverage in Texas,
  • A report on the potential implications for the Texas economy and its fiscal health if oil prices were to remain weak for the next 15 years, 
  • The Aim Hire Texas Workforce Data Tool that allows users to explore the current and future workforce across 24 workforce development areas (WDA) in Texas drawing on data about Texas’ education-to-workforce pipeline from publicly-available state and federal data and analyses. 
  • The Community College Finance Simulator is an online, interactive community college finance simulator that allows Texans to identify how funding to two-year community colleges is allocated and what the impacts of potential changes to current policies might be.

Project Scope

Texas 2036 is soliciting proposals for the development of specific scenario models and an interactive scenario planner (Texas Energy Scenario Planner). Both deliverables are described below.

Deliverable #1: Scenario Models.

The scenario models would provide a longitudinal description of 2022 through 2050, with a particular focus on 2036, of two general scenarios.  The first scenario is the status quo, where Texas continues business as usual with regard to energy production and generation, and does not develop new energy sectors within the state’s portfolio.  The second scenario is that of an energy expansion.  In this second scenario, oil and gas remain part of the state’s portfolio, but the generation fleet and energy sector expands to include a range of new energy technologies, including, but not limited to, carbon capture and hydrogen and geothermal energy.  These two general scenarios, each with differing assumption bases, are as follows:

General Scenario 1. Status Quo.

Scenario 1A.  Status Quo Energy Production, Fleet Composition, Nominal ESG, No Carbon Market.

Assumptions: 

  • Continued hydrocarbon production based upon US Energy Information Administration or other comparable resource projections. 
  • Continued energy production using existing electricity generation fleet composition (natural gas, wind, solar, and nuclear).  
  • Nominal environmental, social, and governance (ESG) compliance for investment capital.  Little financial headwind for the oil and gas sector.  Little financial tailwind for the clean energy sector(s).
  • No developed carbon market.
  • Little to no adoption of alternative transportation fuel sources such as hydrogen fuel cells and electric drivetrain vehicles. 

Model Output Descriptions:  

  • Texas gross domestic product (GDP) growth or loss.
  • Job growth or loss, projected statewide, by region, and for sectors (see Appendix A for sector listing) within regions.
  • State revenue growth or loss, including a description of anticipated state sales, mineral severance, and franchise tax revenues
  • Net capital investment growth in the state’s energy sector.
  • Net energy production, including barrels of oil and MCF of gas produced.
  • Levelized cost (cost of resource over time) of energy of solar, wind, natural gas, nuclear, batteries, hydrogen, and geothermal.
  • State energy exports relative to energy imports.
  • Projected emissions, including EPA criteria air pollutants and carbon emissions.
  • Projected loss of federal funding for non-attainment standards.
  • New technology deployment (hydrogen, CCUS, battery storage) and penetration (extent to which it is being used).

Scenario 1B.  Status Quo Energy Production, Fleet Composition, Established ESG, Carbon Market.

Assumptions: 

  • Continued hydrocarbon production based upon US Energy Information Administration or other comparable resource projections.  
  • Continued energy production using existing electricity generation fleet composition (natural gas, wind, solar).  
  • Established ESG compliance standards for investment capital.  Over 50% of assets under management are compliant with ESG standards.  Significant financial headwind for the oil and gas sector.  Significant financial tailwinds for clean energy sector(s).
  • Nominal fleet conversions to electric drivetrain vehicles (batteries and hydrogen fuel cells)
  • Introduction and establishment of a domestic carbon market by 2030.

Model Output Descriptions:  

  • Texas gross domestic product (GDP) growth or loss.
  • Job growth or loss, projected statewide, by region, and for sectors (see Appendix A) within regions.
  • State revenue growth or loss, including a description of anticipated state sales, mineral severance, and franchise tax revenues.
  • State revenues that are associated with the development of a functioning carbon market.
  • Net capital investment growth in the state’s energy sector.
  • Net energy production, including barrels of oil and MCF of gas produced.
  • Levelized cost of energy.
  • State energy exports relative to energy imports.
  • Projected emissions, including EPA criteria air pollutants and carbon emissions.
  • Projected loss of federal funding for non-attainment standards.
  • New technology deployment (hydrogen, CCUS, battery storage) and penetration.
  • The global market value of a cleaner produced barrel of oil. 

General Scenario 2.  Energy Expansion.

Scenario 2A.  Energy Expansion, Nominal ESG, No Carbon Market.

Assumptions:

  • Continued existing oil and gas industry and hydrocarbon production following US Energy Information Administration (USEIA) projections.
  • Expanded electricity generation fleet development and deployment, including hydrogen, battery storage, nuclear, and expanded renewable energy (including wind, solar, and geothermal).
  • Expanded deployment of carbon capture, underground storage, and carbon recycling.
  • Growth in electric and hydrogen-fueled vehicles. 
  • Nominal environmental, social, and governance (ESG) compliance for investment capital.  Little financial headwind for the oil and gas sector.  Little financial tailwind for clean energy sector(s).
  • No developed carbon market.

Model Output Descriptions:  

  • Texas gross domestic product (GDP) growth or loss.
  • Job growth or loss, projected statewide, by region, and for sectors (see Appendix A) within regions.
  • State revenue growth or loss, including a description of anticipated state sales, mineral severance, franchise tax revenues, and revenues attributable to new energy sectors associated with energy expansion.
  • Net capital investment growth in the state’s energy sector.
  • Net energy production, including barrels of oil and MCF of gas produced and energy production associated with each new energy source
  • Levelized cost of energy, including costs associated with each energy source.
  • State energy exports (LNG, hydrogen) relative to energy imports.
  • Projected emissions, including EPA criteria air pollutants and carbon emissions.
  • Projected loss or gain of federal funding for non-attainment standards.
  • Carbon reduction, including through sequestration or recycling.
  • New technology deployment (hydrogen, CCUS, battery storage) and penetration.
  • The global market value of a cleaner produced barrel of oil. 

Scenario 2B.  Energy Expansion, Established ESG, Carbon Market.

Assumptions:

  • Continued existing oil and gas industry and hydrocarbon production following US Energy Information Administration (USEIA) projections.
  • Expanded electricity generation fleet development and deployment, including hydrogen, battery storage, nuclear, and expanded renewable energy (including wind, solar, and geothermal).
  • Expanded deployment of carbon capture, underground storage, and carbon recycling. 
  • High growth in electric and hydrogen-fueled vehicles. 
  • Established ESG compliance standards for investment capital.  Over 50% of assets under management are compliant with ESG standards.  Significant financial headwind for the oil and gas sector.  Significant financial tailwinds for clean energy sector(s).
  • Introduction and establishment of a domestic carbon market by 2030.

Model Output Descriptions:  

  • Texas gross domestic product (GDP) growth or loss.
  • Job growth or loss, projected statewide, by region, and for sectors (see Appendix A) within regions.
  • State revenue growth or loss, including a description of anticipated state sales, mineral severance, franchise tax revenues, and revenues attributable to new energy sectors associated with energy expansion.
  • State revenues that are associated with the development of a functioning carbon market.
  • Net capital investment growth in the state’s energy sector.
  • Net energy production, including barrels of oil and MCF of gas produced, and energy production associated with each new energy source
  • Levelized cost of energy, including costs associated with each energy source.
  • State energy exports (LNG, hydrogen) relative to energy imports.
  • Projected emissions, including EPA criteria air pollutants and carbon emissions.
  • Carbon reduction, including through sequestration or recycling.
  • New technology deployment (hydrogen, CCUS, battery storage) and penetration.
  • The global market value of a cleaner produced barrel of oil. 

The scenario models would be made available online for public review, including articulation of underlying assumptions, calculations, dependencies, methodologies, data sources, and interaction.  Texas 2036 would use these models to describe the importance of the state’s pursuit and adoption of energy expansion-related policies.

Deliverable #2:  Interactive Texas Energy Scenario Planner

In addition to the scenario models, this project includes the development of an interactive scenario planner based on the aforementioned models.  Here, the public would be able to measure potential economic and environmental outputs using certain policy and market assumptions.  The interactive scenario planner should provide users with a longitudinal graphical description of the economic and environmental outputs achieved through user-designated policy and economic assumptions.

Texas 2036 points to two scenario planners that have already been developed and deployed, that while not entirely representative of the expectations for this project, nonetheless offer examples of similar modeling and interfaces:

  1. The Louisiana Energy Policy Solutions website: https://louisiana.energypolicy.solutions/
  2. National Renewable Energy Laboratory (NREL) State and Local Planning for Energy (SLOPE): https://maps.nrel.gov/slope 

Other Project Components: Website Development, Communication, & Outreach

In addition to developing the scenario model described above, this project will include the following components::

Staff and Stakeholder Engagement

  • Regular interaction and debriefing with Texas 2036 policy advisors, board members, and selected stakeholders regarding project development.

Public Release and Availability of Interactive Texas Energy Scenario Planner

  • Develop and deploy a highly interactive, web-based version of a model for public use.
  • Collaborate with Texas 2036 on the development of a web page and/or microsite in support of an interactive model which includes user guide(s), FAQs, methodology, data source library, etc.
  • Maintenance of the online interactive version of the scenario planner for a period of two years following its public launch.  Maintenance would include annual updates to the scenario planner that reflect state and national policy changes relating to energy policy and any material updates to the underlying data sets.

Communications and Advocacy

  • Assist Texas 2036 with communicating the model’s functionality and findings to the media, general public, and state officials.

Delivery Timeline.

The table below lists the preferred delivery timeframe for specific deliverables. 

Deliverable

Timeframe

Project kickoff meeting

21 days after finalized contract

Preliminary scenario data for legislative disclosure

December 2022 – January 2023

Delivery of beta versions of scenario planner, scenario models.  

May 2023

Delivery of final versions of the scenario planner, and scenario models. 

September 2023

Product launch

November 2023

Although this is the preferred delivery timeline, Texas 2036 will give special consideration to proposals for final project delivery and launch before January 2023.

Preferred Qualifications.

Preferred vendors for this project should have extensive experience with data management, data analytics, data forecasting, and the development of forward-looking longitudinal analyses.  Vendors should also have experience developing predictive, data-driven models using specified assumptions.  In addition, preferred vendors must have experience in developing and maintaining user-interactive models available to the public on web platforms.  Ideal vendor candidates should have prior experience in developing and delivering economic scenario models.

Recommended vendor qualifications include strong familiarity with Texas’ economy, state and national energy sector trends, and state fiscal management.

RFP Requirements.  A qualified RFP must include the following exhibits.

Exhibit A.  Background of Firm or Organization. 

  1. Evidence of your firm’s or organization’s qualifications to provide the above services. The size and organizational structure of the firm.
  2. References and contact information from at least three comparable clients.

* If you are proposing a partnership, joint venture, or other collaboration with more than one entity for this project, please provide all elements of Exhibit A for each participating entity. 

Exhibit B.  Experience in trend modeling and forecasting.

  1. Examples of past work modeling energy and/or infrastructure sector trends; or
  2. Examples of online, interactive data model or scenario planner development.

Exhibit C.  Proposed approach, timeline, and product description.

  1. A high-level description of how your project team would develop the proposed model.
  2. A proposed timeline for project delivery and completion.
  3. A high-level description of the final product, including maintenance requirements.
  4.  If you are proposing a partnership, joint venture, or other collaboration with more than one entity for this project, provide a description of the roles and responsibilities that each entity will play.

Exhibit D.  Data and methodology disclosures.

  1. Disclosure of data sets used for establishing scenario model.
  2. Disclosure of any methodologies, including proprietary methods, used for establishing a scenario model.
  3. Acknowledgment that data and methods will be made publicly available by Texas 2036.

Exhibit E.  Cost proposal.

  1. Vendor’s proposed cost schedule for project completion.  Recommended that proposals include the amount of time anticipated working on this project and itemized cost breakdowns for project segments and/or deliverables.

Exhibit F.  Acknowledgment of Texas 2036 Master Services Agreement (MSA).  

  1. Written acknowledgment of Texas 2036’s MSA (see Appendix B).
  2. Written description of any requested modifications to MSA that would be necessary in order for your firm to execute the agreement or other issues that may not be agreeable as part of the contract term.  

Evaluation of Proposals.

A select committee of Texas 2036 staff will evaluate proposals on a qualitative basis. Texas 2036 may request interviews or demonstrations of respondents as part of the evaluation process.  All respondents will be notified whether or not they were selected following the committee’s decision.

Vendor Questions.

Questions regarding this request for proposals may be submitted via email to energyexpansionrfp@texas2036.org. All questions received will also be answered in a frequently asked questions section posted beneath this RFP on the Texas 2036 website.  

Deadline.

Complete proposal packets must be submitted by 6 PM, Monday, June 20th, 2022.  

Directions for Responding to RFP.

To respond to this RFP, please complete this Texas 2036 Energy Expansion RFP Submission Form