Texas may need to double power generation over next six years: ERCOT leader

A powerful state leader signals scrutiny may be coming to two emerging industries

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NBC 5 learned more about how leaders at the state's largest power grid think it will perform during upcoming hot Texas summers.

ERCOT and Public Utility Commission leaders updated lawmakers in Austin Wednesday morning after a striking new report issued by the grid operator.

They've long known that ERCOT, the state's largest power grid, is most vulnerable on hot late-summer nights as the sun goes down. That's when the big chunk of energy generated by solar power goes offline. It gets worse if the wind goes down as well, and wind generators don't run.

According to a report delivered to lawmakers this week, each August night at around 9 p.m., ERCOT predicts more than a 16 percent chance the grid will have to take emergency measures like asking people to use less energy. ERCOT estimators say there's a 12 percent chance the grid will see rolling blackouts in parts of the state.

“We're trying to put together a puzzle that kind of illuminates how this market can work for the next five to ten to fifteen years," Pablo Vegas, ERCOT CEO, told the Senate Business and Commerce Committee Wednesday.

Vegas and Thomas Gleeson from the Public Utility Commission told lawmakers they are going through a major overhaul of how the grid operates. In the next six to ten years, they argue they'll need to nearly double the amount of power they manage.

“We have the pieces in front of us to build the market for the next twenty years and I’m confident with the tools that we have and the experience of the market is going to contribute to this, I think we’re going to get to that right picture," said Vegas.

The main drivers of the demand are new Artificial Intelligence data centers, cryptocurrency mining operations, and oil facilities in the Permian basin switching to electric power. Those, plus the general population and business growth, are ongoing in Texas.

The most vulnerable time is over the next few years before all the state-run incentive programs through the Texas Energy Fund deliver new power plants.

In the meantime, state utility leaders say they're monitoring the price increases. Gleeson said that after the deadly winter storm Uri, the pendulum between grid resiliency and the cost consumers swung towards resiliency.

"I think it’s time that we really consider costs," said Gleeson.

The new report did state the grid has plenty of power capacity if weather conditions this summer remain "normal."

“It will be a challenge meeting this growth, but I think the Texas market is up to that challenge," said Walt Baum, CEO of the new power generator industry group, Powering Texans.

Baum says the biggest challenges will come in the next few years because data centers and Bitcoin operations can be built much faster than power plants. He says the new Texas Energy Fund is a step in the right direction, but keeping up will be a constant need.

"Now with these new data centers or the just stand-alone bitcoin miners., they can come in and build the load of a medium-size city in 18 or 24 months," said Baum.

A powerful Texas leader named two emerging industries for more scrutiny after the update from ERCOT.

On Wednesday afternoon, Lt. Governor Dan Patrick, presiding officer of the Texas Senate, wrote that new AI data centers and cryptocurrency mining operations would receive more scrutiny next legislative session. A concern for him is how much energy the data centers use compared to the number of jobs they create.

"We want data centers, but it can't be the Wild Wild West of data centers and crypto miners crashing out the grid and turning the lights off," wrote Lt. Governor Patrick.

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