ERCOT, the state’s largest energy grid operator, gave a startling update on Texas’s energy future. NBC 5’s Phil Prazan has the details.
Bitcoin mining, electric cars, new artificial intelligence data centers, and heavy industry moving from combustion engines to electrical engines may mean the state will need to nearly double its power supply in the next decade. That's at least according to a late-April update from ERCOT leaders.
The stakes are high as memories of the deadly power outages during a winter storm in 2021 still haunt Texans memories. Last summer, ERCOT issued a historic amount of weather watches and appeals to conserve energy as the grid strained to keep up during scorching hot days.
This is all happening when the State of Texas is investing billions of dollars to build new natural gas plants and policies and resources come from Washington D.C. to transition the economy towards a greener, cleaner, future. The debate is ongoing whether that transition is happening too fast or too slow but experts tell Lone Star Politics it's been decades since there's been so much change in the energy markets.
The large energy user increase has led the Electric Reliability Council of Texas, or ERCOT, to shift its forecast up 37% since last year.
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During the last Board of Directors meeting, CEO Pablo Vegas laid out what's coming in the next few years and how ERCOT is preparing.
"The tools and the parts are all here for us to be able to respond quickly. We have all of the resource capabilities to do that in ERCOT. It's a matter of enacting and getting the engine turning and developing those resources here," said Vegas.
In Vegas's "new era of planning" presentation, he said the electricity demand will increase from 111 gigawatts per hour to 152 gigawatts per hour. In August 2023, Texas set its all-time record for demand at 85.8 gigawatts per hour.
Lone Star Politics
Covering politics throughout the state of Texas.
Texas already has a pretty diverse set of power supplies. On any given day you'll see on an ERCOT dashboard that the state gets its power from wind, solar, natural gas, nuclear, and coal. ERCOT leaders and energy experts say the state just needs - more.
A state solution is going online. Last year Texas voters approved the $10 billion Texas Energy Fund to provide grants and low-interest loans to help build "dispatchable" power like natural gas plants. The state's Public Utilities Commission just finalized the rules for the program and will begin taking applications. The goal is to increase the power supply when renewable energy isn't as effective like at night when the wind isn't blowing.
Companies can get around ten percent of their plant reimbursed if they complete it by the summer of 2026.
The fund was a goal for Lt. Governor Dan Patrick, who spoke earlier this year at the Texas Public Policy Foundation.
"We've overbuilt wind, we've overbuilt solar, at the cost of natural gas. So when it's cold on a winter night and a storm by the name of Uri comes in, and the wind's not blowing and the sun's not out, we didn't have enough power and people died in that storm," said Patrick, "I made a promise to myself and the senators stood together, we will never allow this to happen again."
The PUC members and the ERCOT members in 2021 were replaced, he noted.
"We still need more natural gas," said Patrick.
Mark Bell from the Association of Electric Companies of Texas, which represents NRG, Oncor, and other major energy companies, says the companies "are working diligently and trying to build the infrastructure that is needed to support that type of growth."
Lone Star Politics asked Bell if the new Texas Energy Fund is enough to get the amount of power plants that the state needs.
"Well, and it is a tool in the toolbox," said Bell, "its portal launched this week and there's a great expectation that it'll be oversubscribed, which is wonderful."
Bell says the biggest challenge will be in the next one to seven years when large energy-sucking data centers and industrial projects will be built faster than new natural gas plants generating the power.
"It just takes a while to get these projects online. You know, we've got data centers and other consumption, large consumption projects coming online that can come online in a year. And, you know, typically, you know, it takes us, you know, anywhere from one to, well, it takes two to five to six years to bring on transmission and distribution, transmission, especially large projects," said Bell.
"Everybody's doing their best. And I do think that you know, it'll be enough in the long term," he said.
Lone Star Politics asked Bell about how the industry feels about the efforts to transition the company from fossil fuels to renewable energy. He wasn't opposed to it - they just need more power, period.
"We're all of the above. I mean, we need it all," said Bell.
Professor Ed Anderson from the University of Texas at Austin specializes in energy supply chains. He tells Lone Star Politics Texas will be in a vulnerable situation in the years ahead when it comes to energy supply but consumers can help.
'You know, we're kind of just at what the grid can handle," said Prof. Anderson, "Normally, the worst time of the year is summer... in the summer, everybody gets hot equally and transmission lines can't transmit as much power."
Anderson says new electric cars plugging into the grid and the heavy industry in the Permian basin adding more electrical equipment is "a big deal."
All of this change is happening at once and he says "Honestly, you will see other projections that are either lower or far higher, like doubling. And so one of the things that ERCOT has to manage is just they have to be a bit on the conservative side because they don't know what's going to happen."
Anderson does say Texans should be worried about the resiliency and stability of the grid as we go into the hot summer. Consumers, he says, can do basic things like turning off air conditioning and other electrical appliances when they're not at home. He notes buying programable thermostats and modern air conditioners will help the grid and also save on everyday energy bills.
"It’s mostly over our heads," said Anderson, but "if we all work together" Texans can help the grid stay stable.
