Texas braces for surge in power demand amid population and industry boom

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Texas is preparing for an unprecedented surge in electricity demand, with projections showing the need for nearly double the state grid’s power capacity within the next six years.

The state’s main electric grid operator, the Electric Reliability Council of Texas or ERCOT, attributes the forecast in part to a wave of large-scale industrial development from data centers, hydrogen production and oil and gas operations transitioning to electrification. Population growth and extreme weather events also contribute to the state’s increasing energy needs.

Despite a 30% increase in generation capacity over the past four years — largely driven by the growth of solar, wind, and battery storage — energy experts who gathered at a Texas Tribune event at Dallas College at the Cedar Valley campus Thursday said the grid must adapt fast to meet growing demand.

They said the state’s big challenges include legislative uncertainties and keeping residents' electric bills from skyrocketing.

“If anyone could do it, it'll be Texas. Like we're faster than every other state. We're faster than most regions in the world,” Michael E. Webber, an energy policy expert at the University of Texas at Austin, said. “If we don't get in our own way.”

The event, moderated by Texas Tribune politics reporter Kayla Guo, explored how Texas can meet this moment: preparing its grid and infrastructure for a dramatic increase in demand, managing costs and ensuring reliability for Texans. Guo was also joined by Sandra Haverlah, president of the Texas Consumer Association and Garrett Golding, assistant vice president for energy programs at the Federal Reserve Bank of Dallas.

For consumers, the stakes are high. Haverlah said that residential electrical bills will reflect the cost of building new grid infrastructure and upgrading and maintaining existing facilities and equipment.

“For many years, that grid wasn't upgraded, or those particular lines and poles weren't upgraded, but now we're looking at storms that are worse and people are upset about outages,” Haverlah said. “People want the equipment upgraded, but the equipment is now more expensive.”

The panel also discussed Senate Bill 6 by Sen. Phil King, R-Weatherford, a high priority bill that would place new obligations on large electricity users, give state regulators more tools to oversee how and when those businesses connect to the grid and help ERCOT better forecast the electricity needs to avoid situations like the catastrophic 2021 winter storm.

ERCOT lost control of the state’s power supply during Winter Storm Uri in February 2021, leaving millions without electricity and causing widespread blackouts that lasted days. Hundreds of Texans died. The storm left many concerned about the grid’s reliability and those concerns still linger years later.

The bill would require large electricity users like data companies to disclose competitive information about where else they might be considering locating. Webber said that is causing nervousness among tech companies like Microsoft, because it could impact their business strategy.

Data center companies are also worried about giving the state control over their operations and disclosing their energy needs.

Webber said that while data center companies are generally willing to reduce power usage during peak hours, several are uncomfortable with the prospect of political interference in their business operations.

Golding said a wave of battery storage projects has come to Texas since Winter Storm Uri, which use rechargeable batteries to store electricity and release it when it’s most needed on the grid. He said that batteries have played a crucial role in supporting the grid during peak hours, especially during heat waves.

“It's a very elegant solution. As solar starts to wind down in the late afternoon, batteries can ramp up and fill that gap very well,” he said.

Golding said that batteries will be a critical component of Texas's evolving energy mix.

Disclosure: Microsoft and University of Texas at Austin have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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The Texas Tribune is a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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