Demand for electricity in Texas has become a huge issue in the last decade or so, as the population continues growing. More and more strain has been placed on the Texas power grid as our population has risen. And as more businesses and tech firms arrive in the state, there is another big power drain being added to the state: data centers.
More data centers have been arriving, or been planned, in Texas over the next few years, and that is pushing ERCOT's estimates for power demand by 2030 through the roof. They estimate the state power demand will eclipse 200,000 megawatts (MW) by 2030, a 40-percent jump from the present day. That equates to about 48,000 MW. Compare that to last year's estimates, when ERCOT projected an increase of about 40,000 MW by 2030.
Brad Johnson of The Texan says this is just a sign of the changing times in Texas.
"Another steep, steep increase, showing just how much commerce and businesses are coming to the state, which all comes with electricity needs," he says.
When you factor in the state's population growing by over 300,000 last year, it creates an untenable situation that needs a resolution. ERRCOT has tried addressing it in recent years with solar power and wind farms, but it has proven time and again to be ineffective in truly meeting the state's demand.
In reality, the only people with any power to fix the problem lie in Austin. Lawmakers have been taking steps this session to at least somewhat fix the problem. Currently, Senate Bill 6 is floating around the Capitol, which would establish guidelines for data center interconnection into the ERCOT grid, thus proving the projects are financially committed to the state. That could go a long way in both keeping businesses here, and in keeping Texans homes lit.
"The legislature is looking at it, knowing they have to compensate for it somehow. We have to put guidelines around the data centers, and how they connect to the grid," says Johnson. "Are they bringing power with them? Are they paying transmission costs? Because all of that is going to get uplifted to the market, and rate payers across the state."
Of course, the industry is vehemently against the idea, claiming it will stymie growth. But realistically, it could do the opposite and also provide the state with more sound financial footing for the power grid.
In the end though, it really comes down to one simple thing. The state needs more power, and there are not many places from which to get it.
"The state knows this is problem, and they are not shying away from it...neither is ERCOT, the PUC, or the legislature, but of course, there are differing opinions on how to address this," Johnson says. "They know this is a problem and are not shooting in the dark here."
Only time will tell is the state will have enough power supply to meet the ever-growing demand. But if lawmakers in Austin do not address this sooner, rather than later, we could be looking at even bigger issues just five years down the road.
Photo: SAMEER AL-DOUMY / AFP / Getty Images