Texas faces massive electricity demand

By EPN Staff

Texas' main electric grid operator said this month that electricity demand in the state could more than double over the next five years, with most of that new demand coming from data centers.

The Electric Reliability Council of Texas’ (ERCOT) latest projections showed an astounding 86 gigawatts of data center demand between now and 2031, though the group cautioned that much of this demand may not come to fruition.

Some of the projected demand is due to a 2023 change in Texas state law that required ERCOT, which manages the grid for most of the state, to include all prospective large users in its calculations instead of waiting until financial commitments have been made.

Even so, the projections feed concerns about power-hungry computer centers, which need electricity to run computations and to cool their systems, and whether the state can physically add enough power to its grid to support these facilities.

Why it matters

For years Texas, and the broader United States, saw limited growth in power demands, but the growing use of artificial intelligence has juiced projections.

The 86-gigawatts of new data center demand in ERCOT’s projections would match the state’s highest energy output: 85.5 gigawatts, a record set in August of 2023, according to The Dallas Morning News.

It would be an unheard of addition. ERCOT said that in the early 2000s it added 27 gigawatts of natural gas generation over a 5-year period. In the last three years it added 25 gigawatts of wind and solar.

“These time periods of rapid resource growth provide some insight into the amount of new generation that can be reliably interconnected over a short period of time,” ERCOT said in its load growth presentation.

The bigger picture

Demand projections depend on expected economic activity, and there is growing concern that data center operators, in a rush to build new facilities and get the best deals, are making duplicative requests in multiple states, skewing predictions.

ERCOT’s presentation said that, for data centers that were slated to go into service from 2022 to 2024 actual “load was 49.8% of the requested amount.”  Accounting for that and factoring other metrics used to predict future need cut ERCOT’s load forecast for 2031 from 218 gigawatts to 145 gigawatts, which would still be a major increase.

The Dallas Morning News reported that the ambiguity in demand projections has led to legislation in the state capital that would tinker again with the forecasting process.

Additional details

The U.S. Energy Information Administration said last fall that energy consumption was growing fastest in Texas and one of the main reasons was large-scale computing facilities, including data centers and cryptocurrency mining operations.

The EIA dubbed those future demand levels “uncertain.”