CEO, who delivered a jaw-dropping new estimate saying Texas power needs would far surpass earlier projections due to factors including growth, weather and a new state law changing forecast parameters. These sudden changes demand swift recalibrations in energy planning and resource management by ERCOT, often under intense scrutiny. Challenges Ahead Peak consumer demand for electricity on the Texas grid ballooned in the summer of 2023, setting a record at 85.508 gigawatts (GW) on August 10. This record is more than 14% higher than the peak demand in August 2019. But by 2030, peak demand could nearly double to 150 GW, ERCOT CEO Pablo Vegas told the Senate Committee on Business and Commerce on June 12. “It’s a fairly significant step change from a demand perspective,” said Vegas. “All of that [demand] may not come, but even if a significant portion of it does, it’s a really significant growth number.” Spikes in demand on the grid, especially since 2020, result from a myriad of interrelated factors in Texas, including population growth, extreme weather patterns, the proliferation of electric vehicles and the expanding footprint of data centers, artificial intelligence and cryptocurrency mining. ERCOT’s forecast also was affected by a new law prescribing how to estimate growth. Population Growth Texas’ population is booming — and it has been for more than a decade. In 2022, Texas joined California as the only other state with a population of 30 million or more. Between 2012 and 2022, the state’s population grew by 3.9 million, or 15%, the largest growth among all states and more than double the U.S. growth of 6.2%. In Texas’ largest metro areas, population growth was even higher. This growth places additional demands on the state’s power grid. Extreme Weather Well before the official start of summer this year, the Texas grid set several new daily power consumption records, as households and businesses cranked up their air conditioners to cope with an unseasonably early heat wave. One of those days was May 27, during which power demand peaked at 77.122 GW and shattered the previous May record of 71.645 GW in 2022. According to ERCOT, six of the state’s 10 hottest summers on record since 1895 have occurred since 2010. It’s not only the heat that drives up power demand, but also the severe cold spells that have hit Texas in recent years. In February 2021, Winter Storm Uri caused power demand to surge as Texans struggled with near zero temperatures and forced ERCOT to initiate rolling blackouts across the state to avoid a catastrophic total blackout. Nearly 70% of Texans lost power at some point during the storm. Electric Vehicles Electric vehicles (EVs) have proliferated in recent years, and just about every car company now sells at least one EV model. As of August 2024, there were more than 300,000 EVs registered in Texas, up from fewer than 10,000 in 2014. Most EV drivers currently reside in the state’s biggest metro areas. As EV use increases, Texas’ power grid will take on additional demand. While EV sales have slowed globally, ERCOT projects that in 2029 EVs will make up 4% of all vehicles on the road and consume 6.7 terawatt-hours (TW). Data Centers and Artificial Intelligence The modern economy, in which business and commerce are conducted online in some form or another, requires a vast network of data centers, the facilities that house servers and other equipment that make the internet and all that comes with it — online shopping, banking and health care — a reality. Data centers are typically energy-intensive, using continuously running cooling units and fans to prevent servers from overheating. Because of its relatively cheap energy market, Texas is experiencing rapid growth in data centers, especially between Dallas-Fort Worth (DFW) and San Antonio. At the time of this writing, there were 279 data centers in Texas, with 141 in DFW. In 2023, DFW was home to about 0.565 GW of data center inventory, the second-most in the U.S. Data centers supporting artificial intelligence (AI) and artificial general intelligence (AGI) applications, however, will consume even more energy. “AI and AGI data centers are one of the fastest-growing components of the data center industry that’s coming,” said Vegas. “If you look up ‘what is ERCOT’ with a regular Google system versus an AI Google search, the amount of energy that it takes to run the AI search is between 10 and 30 times the power requirement. “That’s just a simple search. AI is being used to teach large language models, the concept of generative AI, where you can ask it to write a story about your life and give it a few prompts — those types of things use much more energy.” Cryptocurrency Likewise, cryptocurrency mining — or the practice of solving complex mathematical problems with hundreds or thousands of servers in specialized data centers to create digital currency such as bitcoin — has gained traction in Texas due to the state’s infrastructure, lower water and electricity prices, and favorable economic policies and incentives. By one estimate, a 1-megawatt (MW) cryptocurrency mine uses more energy than 700 households — the largest crypto mine in Rockdale, Texas, is 450 MW. As of the fourth quarter of 2023, the total power capacity of cryptocurrency mines operating in Texas was 2,717 MW, more than anywhere in North America by a large margin. Georgia is a distant second at 525 MW. 21 DEALERS’ CHOICE
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