The demand on Texas’ energy grid by 2032 will be nearly double a record that was set last week, and state regulators say they will need more varied electrical generation to meet that demand. 

The Electric Reliability Council of Texas (ERCOT) forecasts the statewide electric demand will reach roughly 175,000 megawatts — one megawatt can power 250 residential customers during peak hours — in six years, driven by a massive influx of data centers, along with Texas’ growing population and other industrial projects as the economy continues to boom, the council’s CEO Pablo Vegas told the state’s Senate Business and Commerce Committee on Wednesday. 

Regulators said they are confident the grid will meet that demand thanks to an influx of solar power and battery storage, but also cautioned that the state needs more natural gas power generation to keep the lights on when the sun goes down and solar quits generating electricity. 

“Texas is continuing to grow beyond data centers significantly,” said Thomas Gleeson, chair of the Public Utility Commission of Texas. “We’re doing great as a state and continuing to win on almost every front. There is still going to be a need to serve all the rest of the non-data center load, and that is going to require a balanced mix of resources to do that.”

The latest projection comes days after soaring temperatures statewide last week broke record demands on the ERCOT grid twice, the highest of which was 91,308 megawatts on July 22. That broke the record demand of 87,403 megawatts set the previous day, which broke the old high of 85,508 megawatts set in August 2023. 

Those records, however, hardly registered in the consciousness of most Texans as ERCOT’s calls for energy conservation, a fairly regular occurrence during the hottest months of recent years, were not necessary on the two days of peak energy demand. The grid seamlessly met the demand because of solar and battery generation that has been added to the grid in recent years.

“We hit an all time peak, and we had no issue hitting that peak,” Gleeson said.

When the record was set around 5 p.m. July 22, the ERCOT grid had more than 20,000 megawatts of buffer between its demand and the capacity of electricity generation committed to the grid. This meant the grid had the capacity to serve an additional 5 million homes. 

The grid’s ability to stand up during the hottest daytime hours was largely attributed to a massive growth of solar generation, which at times exceeded 45% of all electricity being generated. On July 21 and then again on Monday, the grid broke records for total electricity generated by solar, which now sits at 34,700 megawatts. And on July 22, the grid set a record of 11,980 megawatts of energy being discharged from batteries.

Since Winter Storm Uri in 2021 plunged most of the state into days of subfreezing temperatures that disrupted energy generation and forced ERCOT to implement rolling blackouts affecting millions of people, legislators and the public have widely scrutinized the power grid. 

The Legislature has since passed laws requiring power generators to insulate themselves from the extreme weather that knocked them offline during Uri, as well as more recent laws that require data centers to disconnect from the grid during periods of strain. 

The PUC and ERCOT are also remaking their system for forecasting future energy demand on the grid as energy hungry data centers overwhelm their old system. The forecast produced by ERCOT in April called for 367,790 megawatts of demand by 2032, a number regulators said was almost certainly flawed. ERCOT has since withheld official forecasts while its system for producing those numbers is reworked to better reflect the demands of large loads like data centers. 

Solar and battery saving the day

Texas has become the nation’s leader in both solar energy and battery storage since 2021, providing new and significant sources of power to the grid. 

Texas’ deregulated energy market pays power generators only for actual power supplied to the grid based on pricing that goes up when demand is high. Batteries typically charge during the day when electricity prices are at their cheapest and solar is providing large amounts of electricity to the grid. When the sun begins to set and the amount of power generated by solar dips, batteries release the power they have stored, keeping the grid stable and lowering energy prices. The nighttime hours are typically windier, allowing for wind farms to pick up some of the slack while natural gas power plants switch online and provide the majority of the state’s power needs. 

Last year, ERCOT added 16,000 megawatts of new generation, most of which was solar and batteries, Vegas said. 

The state’s solar capacity more than doubled between 2023 and 2025, and battery storage more than tripled, according to ERCOT. 

”Texas has been fortunate to be able to develop in the last four or five years so much additional solar and battery storage which has helped make our grid more reliable, less costly and cleaner,” said Cyrus Reed, conservation director for the Lone Star Chapter of the Sierra Club. “Since 2021, even with record demands in the summer, we were able to meet those demands, and solar and battery storage was a big reason we were able to do that.”

While not all of it will come to fruition, there are 460,000 megawatts of interested generation in the ERCOT generation queue, Vegas said. About 70% of that potential load is made up of solar and batteries and about 78,000 megawatts are from natural gas power plants, Vegas added.

That amount of new solar and battery generation has pushed the period of highest concern for the grid back much later into the day than it was just five years ago, Vegas and Gleeson both said. 

More gas needed at night 

Rather than supply and demand being at their tightest point during the period of highest demand during the day, that now occurs late in the evening when solar is not generating electricity and batteries are running out of charged power to release back onto the grid. That is when natural gas power plants provide most of the state’s energy, and legislators and regulators said Wednesday they were concerned there may not be enough in the future. 

“If that continues while load grows very rapidly, we’re going to get to a place where we have a lot more scarcity events,” Vegas said. “The ease at which we got through last week’s peaks would not be the way I would characterize the future in two to three years. I think it will be much more difficult.” 

In 2023, the Legislature created the Texas Energy Fund, a $10 billion program that provides low-interest loans to companies to develop new natural gas power plants in Texas. 

That program saw a slow release of funds initially, approving only two new power plants in the first two years of its existence. However, it has since issued several more loans, now totaling 5,000 megawatts of new generation from eight separate projects, Gleeson said. A further 2,300 megawatts of generation from four projects are being reviewed by the PUC, Gleeson added. 

Legislators on the committee said they were considering further legislative efforts to spur the development of natural gas power plants in Texas.

In Texas’ deregulated energy market, power plants only make money when their electricity is sold. If energy prices are low, potential power plant developers are less likely to invest in a new power plant, said Walt Baum, CEO of Powering Texans, a trade association that represents natural gas power generators.

Baum said ERCOT’s reworking of its load forecasting will be crucial to allow natural gas power generators to better understand the state’s future power needs, as well as potential reworking of ERCOT’s price structure for dispatchable power plants.

“That is going to help spur new development because we’re going to know these projects are real,” Baum said. 

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