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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Texas electric grid operator is expecting "tremendous electric demand growth" over the next five to seven years, driven mainly by data centers, oil and gas operations, other new businesses and new residents, Pablo Vegas, president and chief executive of the Electric Reliability Council of Texas (ERCOT) (Austin, Texas), told the agency's board of directors this week. The surge in future demand could be about 40,000 megawatts (MW) above the agency's forecast from last year, and could place added stress on ERCOT's ability to keep the lights on in the Lone Star State.
ERCOT, which serves an estimated 90% of Texas, hit a record peak load of 85,508 MW on August 10, 2023, the agency said. By 2030, Vegas said April 23, ERCOT's load could reach about 152,000 MW--nearly double its historic peak and far higher than what it projected in 2023.
The agency has issued a number of energy emergency warnings in recent years. Strong demand growth coupled with hotter-then-expected weather, unplanned plant outages, retirement of dispatchable generation and delays in bringing new generation online have squeezed reserve margins and, in some cases, led to calls for Texans to implement voluntary power conservation measures. For more on that, see November 22, 2023, article - ERCOT Pulls RFP for Emergency Winter Generation, Blackouts Possible in Texas; May 11, 2023, article - Texans May Face 'Extreme' Power Conditions this Summer; and May 24, 2022, article - Texas' Early Call for Power Conservation Sends Worrisome Signal.
The ERCOT chief said "large loads," including cryptocurrency mining, hydrogen and hydrogen-related manufacturing, data centers, and electrification, could add about 41,000 MW of new, unplanned-for electric load by 2030. Electric demand in the Permian Basin, the state's largest oil and gas producing area, could add another 24,000 MW of electric demand that had not been forecast.
Vegas called data centers' demand for electricity "insatiable."
He told the ERCOT board, "This new view shows unprecedented and rapid load growth, approximately 40,000 MW greater than last year's forecast, which is creating new challenges and opportunities for the ERCOT System." He said the agency is adapting to and planning differently for the future.
Previously, ERCOT's regional transmission plan did not require the agency to plan for far-in-the-future new electric demand until those customers driving up that load achieved a certain financial milestone. But last year, the Texas legislature changed that, requiring ERCOT to plan for future electric load that previously had been considered less-than-certain.
Vegas chose to accentuate the bright side: ERCOT is entering a "New Era of Planning, focus(ing) on ensuring all areas of system planning--from generation and load interconnections to transmission development--can adapt to better serve the needs of the rapidly growing Texas economy."
The agency is changing various processes it uses to plan for and meet future electric demand.
He expressed no doubt that the agency could meet future electric demand. "ERCOT is in a better position today than it ever has been to meet today's and tomorrow's challenges," Vegas told the ERCOT board. "New challenges and opportunities are being created for the ERCOT system. The new load forecast in ERCOT creates significant investment opportunities for balanced generation growth."
In last year's legislative session, Texas lawmakers created a multi-billion-dollar fund to support the construction of new dispatchable generation and the refurbishment of aging power plants. For more on that, see June 9, 2023, article - Texas Legislation Would Give $10 Billion Boost for New Dispatchable Generation.
Vegas told the ERCOT board that the agency had 1,775 active generation interconnection requests totaling 346,000 MW as of March 31, 2024. That queue consists of:
But considering only those projects with a "medium" or "high" probability of meeting their current construction schedules significantly winnows that list to 161 projects worth about $44.3 billion. Proposed renewable energy and battery energy-storage projects dominate that list.
As for dispatchable resources, Industrial Info's Global Marketing Intelligence (GMI) platform is tracking plans from developers to start construction of 25 gas-powered generation projects, with total generating capacity of about 6,500 MW, between January 2023 and December 2025. The value of these projects is about $4.81 billion. All of these projects are considered to have a "medium" or "high" probability.
Projects with a "medium" probability have a 70% to 80% likelihood of kicking off construction according to schedule, while projects with a "high" probability have an 81% to 99% likelihood of starting construction on time.
Texas is the latest market to report a surge in future electric demand, driven at least in part by data centers, cryptocurrency mining or artificial intelligence. For more on that, see April 24, 2024, article - Georgia Power Gets OK for New Resources to Meet Demand; April 23, 2024, article - Data Center Activity Propels Virginia to $12.7 Billion of Projects Under Construction; and April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex.
Geoffrey Lakings, a senior energy strategist with IIR Energy, said: "In the U.S market, data center electric demand is expected to double by 2030, to about 35,000 MW in 2030 from about 17,000 MW currently. And even that could underestimate future electric demand growth in that sector: Advanced AI and Large Language Models (LLM) have yet to uncover the many applications residing in the enterprise client."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
ERCOT, which serves an estimated 90% of Texas, hit a record peak load of 85,508 MW on August 10, 2023, the agency said. By 2030, Vegas said April 23, ERCOT's load could reach about 152,000 MW--nearly double its historic peak and far higher than what it projected in 2023.
The agency has issued a number of energy emergency warnings in recent years. Strong demand growth coupled with hotter-then-expected weather, unplanned plant outages, retirement of dispatchable generation and delays in bringing new generation online have squeezed reserve margins and, in some cases, led to calls for Texans to implement voluntary power conservation measures. For more on that, see November 22, 2023, article - ERCOT Pulls RFP for Emergency Winter Generation, Blackouts Possible in Texas; May 11, 2023, article - Texans May Face 'Extreme' Power Conditions this Summer; and May 24, 2022, article - Texas' Early Call for Power Conservation Sends Worrisome Signal.
The ERCOT chief said "large loads," including cryptocurrency mining, hydrogen and hydrogen-related manufacturing, data centers, and electrification, could add about 41,000 MW of new, unplanned-for electric load by 2030. Electric demand in the Permian Basin, the state's largest oil and gas producing area, could add another 24,000 MW of electric demand that had not been forecast.
Vegas called data centers' demand for electricity "insatiable."
He told the ERCOT board, "This new view shows unprecedented and rapid load growth, approximately 40,000 MW greater than last year's forecast, which is creating new challenges and opportunities for the ERCOT System." He said the agency is adapting to and planning differently for the future.
Previously, ERCOT's regional transmission plan did not require the agency to plan for far-in-the-future new electric demand until those customers driving up that load achieved a certain financial milestone. But last year, the Texas legislature changed that, requiring ERCOT to plan for future electric load that previously had been considered less-than-certain.
Vegas chose to accentuate the bright side: ERCOT is entering a "New Era of Planning, focus(ing) on ensuring all areas of system planning--from generation and load interconnections to transmission development--can adapt to better serve the needs of the rapidly growing Texas economy."
The agency is changing various processes it uses to plan for and meet future electric demand.
He expressed no doubt that the agency could meet future electric demand. "ERCOT is in a better position today than it ever has been to meet today's and tomorrow's challenges," Vegas told the ERCOT board. "New challenges and opportunities are being created for the ERCOT system. The new load forecast in ERCOT creates significant investment opportunities for balanced generation growth."
In last year's legislative session, Texas lawmakers created a multi-billion-dollar fund to support the construction of new dispatchable generation and the refurbishment of aging power plants. For more on that, see June 9, 2023, article - Texas Legislation Would Give $10 Billion Boost for New Dispatchable Generation.
Vegas told the ERCOT board that the agency had 1,775 active generation interconnection requests totaling 346,000 MW as of March 31, 2024. That queue consists of:
- 155,000 MW of solar generation
- 141,000 MW of battery energy storage
- 35,000 MW of wind generation
- 15,000 MW of gas generation
But considering only those projects with a "medium" or "high" probability of meeting their current construction schedules significantly winnows that list to 161 projects worth about $44.3 billion. Proposed renewable energy and battery energy-storage projects dominate that list.
As for dispatchable resources, Industrial Info's Global Marketing Intelligence (GMI) platform is tracking plans from developers to start construction of 25 gas-powered generation projects, with total generating capacity of about 6,500 MW, between January 2023 and December 2025. The value of these projects is about $4.81 billion. All of these projects are considered to have a "medium" or "high" probability.
Projects with a "medium" probability have a 70% to 80% likelihood of kicking off construction according to schedule, while projects with a "high" probability have an 81% to 99% likelihood of starting construction on time.
Texas is the latest market to report a surge in future electric demand, driven at least in part by data centers, cryptocurrency mining or artificial intelligence. For more on that, see April 24, 2024, article - Georgia Power Gets OK for New Resources to Meet Demand; April 23, 2024, article - Data Center Activity Propels Virginia to $12.7 Billion of Projects Under Construction; and April 16, 2024, article - Data Center Construction Propels Electric Load Growth and Utility Capex.
Geoffrey Lakings, a senior energy strategist with IIR Energy, said: "In the U.S market, data center electric demand is expected to double by 2030, to about 35,000 MW in 2030 from about 17,000 MW currently. And even that could underestimate future electric demand growth in that sector: Advanced AI and Large Language Models (LLM) have yet to uncover the many applications residing in the enterprise client."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
