Texas electric grid 101: Your questions answered
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Power Surge: Texas’ Soaring Electric Demand
It’s hot out there. We’re all giving thanks for our air conditioners which are doing double duty with the early skyrocketing temperatures.
So, it’s time to take a look at exactly how much electric power we’re using, how much we’ll need in the future and what Texas is doing to meet that growing demand.
Summer forecast: How much electric power are we going to use?
In May, Texas set six records for daily power consumption. And with summer temperatures forecast to be above normal again, more electricity will be needed to cool our homes and businesses.
Just this week, the Electric Reliability Council of Texas reported that there will be a 16% chance of an electric grid emergency and a 12% chance of rolling blackouts this August. The state’s electric grid manager predicts the grid would be most stressed between 8 p.m. and 9 p.m. when solar energy production goes away and wind energy could become more variable.
In addition, a recent report by the North American Energy Reliability Corporation found that Texas has an elevated risk of not having sufficient operating reserves should demands skyrocket during the summer.
Texas’ elected officials and state grid operators are well aware of these issues, as net electric generation has not been able to keep up with our booming population and economy.
Over the past decade, total consumption has increased by 29% (379,000 MWh to 487,000 MWh) but generation has increased by 25% from 433,000 MWh to 541,000 MWh, according to EIA numbers.
Source: U.S. Energy Information Administration
Did you know? One key driver of electric demand is the growth of data centers. Data center inventory in North Texas increased by 173% in the second half of 2023, pushing its total to 565.3 megawatts. And San Antonio’s CPS Energy is gearing up for a tenfold increase in demand from data centers, projected to hit 3,300 MW by 2033. That’s enough to power more than 650,000 homes!
How much electricity will we need in the future?
Source: ERCOT 6-day forecast of future system conditions
Texas’ electric consumption shows no signs of slowing down in the coming decades. Just this week, the Public Utility Commission of Texas (PUC) said ERCOT expects power demand to nearly DOUBLE by 2030, increasing from 85 gigawatts to 150 gigawatts.
It’s not just air conditioners driving up demand on the Texas electric grid. The PUC expects 60% of the new demand to come from Bitcoin mining and data centers, including those run by artificial intelligence.
In March, Texas 2036 released the Future of Texas Energy dashboard, which projected a doubling of power would be needed between now and 2050. Given these new ERCOT projections, we’re now looking at potentially doubling even that estimate.
This makes even more urgent the need to generate more electricity along with the transmission infrastructure necessary to connect power plants to consumers. And it takes time to build both of these components. Efforts by electric officials to work with generators and electric transmission and distribution utilities to prepare for this future are essential.
What’s happening with Electric Vehicles?
The number of EVs on the road has grown dramatically over the past decade. Today, there are over 280,000 EVs registered in Texas — up from just over 9,000 a decade ago.
While demand for EVs has surged in recent years, the immediate future of the technology has become less clear in 2024, driven by slumping Tesla sales.
How do we generate the power we need?
Source: ERCOT Fuel Mix data (June 12, 2024)
Today, Texas’ electric power comes from a mix of different resources including natural gas, coal, solar, wind, and nuclear power along with a few others.
By far the greatest fuel for electric generation in Texas is natural gas, which accounts for over half of the fuel mix. Natural gas is followed by wind, which accounts for 22%, up from only 8% ten years go.
The Big Picture: We need more power, and need it built fast. To do that, we need to embrace what Texas 2036 likes to call an “all of the above” energy policy in which all energy technologies are adopted to create the most reliable and affordable electric grid of the future.
This means we need to embrace a diverse fuel mix that includes traditional electric fuel sources along with embracing newer technologies.
Right now, Texas has several natural gas plants in the queue, based on last year’s loan program.
Recent announcements include:
That’s not all. Texas has several new generation options to generate more power.
Small Nuclear Reactors
Nuclear power is clean, predictable and reliable, and new small reactors are getting a lot of attention.
However, despite being smaller, they will require significant capital investments. So, a long-term strategic plan will be necessary to create the right path for bringing more nuclear energy to Texas.
Source: The South Texas Project Electric Generating Station (Facebook)
Geothermal Energy
When many think of geothermal energy, they think of Scandinavia, but maps and data show that the amount of heat energy underneath Texas is estimated to be many thousands of times larger than what we would need to power not only our state, but the world. And geothermal energy is clean, abundant, always on, and has a smaller surface footprint than other energy sources.
Battery Energy Storage
Battery storage has been nicknamed the “Holy Grail” of the electric industry, as once electric power is produced, it needs to be consumed. The ability to store it can allow for dispatchable energy when we need it during peak demand while leveraging underutilized powerplants or renewable energy produced at night or off peak hours.
Storage capacity in Texas has increased roughly tenfold since 2020. That growth is expected to continue. As of November 2023, Texas had 3.2 gigawatts of storage, second to California, and that capacity is expected to double this year to 6.4 GW.
So, the big question: what will homeowners’ electric bills look like?
Everything’s bigger in Texas — our houses, our electric appliances, and our temperatures. And along with all that comes bigger electric bills. In August 2023, at the height of residential electric consumption, the average electric bill in Texas was $255 — 38% more than at the same time in 2014.
This trend could continue under current conditions. The average retail price of electricity in Texas has increased by 94% since 2001, from 7.68 cents per kilowatt hour to 14.92 cents per kWh.
Source: U.S. Energy Information Administration
While this seems high, that average retail price of 14.92¢ per kWh for electricity, though, is about 11% less than the national average. For comparison, New York residents pay an average of 23.64¢ per kWh and Californians pay a whopping 32.47¢ per kWh! Another reason to be glad you don’t live in New York or California!
Two challenges to think about in the future.
Source: American Public Power Association
Water
For a majority of sources of energy (not including solar or wind), generating electricity requires quite a bit of water. An average of 11,857 gallons of water was used to generate each MWh of electricity produced in 2020.
That’s because fuel is used to produce steam that then turns the turbines to produce energy. So, as Texas faces significant water challenges with rising temperatures, the role water plays in our electric generation will be key.
Transmission
Producing enough electricity is important, but it can’t satisfy demand if it can’t get to where it’s needed. State senators met this week to discuss the future transmission needs of Texas with the goal of making recommendations to ensure the infrastructure is there to support future demand.
Worried about your electric bill this summer? What are you doing to trim your electricity usage?
