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Texas Needs Energy Amid Rise of Electric Vehicles, Data Centers, Crypto Mining – NBC 5 Dallas-Fort Worth
Bitcoin mining, electric cars, new artificial intelligence data centers and heavy industry’s shift from combustion engines to electric motors could mean the state will have to nearly double its energy supply over the next decade. At least that’s according to a late April update from ERCOT leaders.
The stakes are high as memories of deadly power outages during a winter storm in 2021 still haunt Texans’ memories. Last summer, ERCOT issued a historic amount of weather warnings and issued calls to conserve energy as the grid struggled to keep up during scorching days.
All of this comes as the State of Texas is investing billions of dollars to build new natural gas plants and the policies and resources are coming from Washington DC to transition the economy to a greener, cleaner future. There’s ongoing debate about whether the transition is happening too fast or too slowly, but experts tell Lone Star Politics that it’s been decades since this much change has occurred in energy markets.
The large increase in energy use led the Electric Reliability Council of Texas, or ERCOT, to change its forecast upward by 37% from last year.
During the last board of directors, CEO Pablo Vegas explained what will happen in the coming years and how ERCOT is preparing.
“The tools and parts are all here to allow us to be able to respond quickly. We have all the resources to do that at ERCOT. It’s a matter of getting the engine in place and running and developing those resources here,” Vegas said .
In Las Vegas’ “new planning era” presentation, he said electricity demand will increase from 111 gigawatts per hour to 152 gigawatts per hour. In August 2023, Texas set its all-time demand record with 85.8 gigawatts per hour.
Texas already has a pretty diverse set of feeders. Every day you’ll see on an ERCOT dashboard that the state gets its energy from wind, solar, natural gas, nuclear and coal. ERCOT leaders and energy experts say the state just needs more.
A state solution is going online. Texas voters last year approved the $10 billion Texas Energy Fund to provide grants and low-interest loans to help build “dispatchable” energy such as natural gas plants. The state Public Utilities Commission just finalized the program’s rules and will begin taking applications. The goal is to increase electricity supply when renewable energy is not as effective as at night, when the wind is not blowing.
Companies can get a refund of about 10% of their installations if they complete them by summer 2026.
The fund was a goal for Lieutenant Governor Dan Patrick, who spoke earlier this year at the Texas Public Policy Foundation.
“We’ve boosted wind power, we’ve boosted solar power, at the expense of natural gas. So when it’s cold on a winter’s night and a storm called Uri comes through, and the wind doesn’t blow and the sun doesn’t shine. ‘is, we didn’t have enough power and people died in that storm,” Patrick said, “I made a promise to myself and the senators that we stood together, we will never let this happen again.”
PUC members and ERCOT members in 2021 have been replaced, he noted.
“We still need more natural gas,” Patrick said.
Mark Bell of the Association of Electric Companies of Texas, which represents NRG, Oncor and other major energy companies, says the companies “are working diligently and trying to build the infrastructure needed to support this type of growth.”
Lone Star Politics asked Bell if the new Texas Energy Fund is enough to get the amount of power plants the state needs.
“Well, and it’s a tool in the toolbox,” Bell said, “its portal launched this week and there’s a great expectation that it will have oversubscriptions, which is wonderful.”
Bell says the biggest challenge will be over the next seven years, when large data centers and industrial projects that siphon energy are built faster than the new natural gas plants that generate the energy.
“It just takes a while to get these projects online. You know, we have data centers and other consumer, large-scale projects coming online that can be online in a year. And, you know, typically, it takes us , you know, from one to, well, it takes two to five to six years to get transmission and distribution, transmission, especially large projects going,” Bell said.
“Everyone is doing the best they can. And I think, in the long run, that will be enough,” he said.
Lone Star Politics asked Bell what the industry thinks of efforts to transition the company from fossil fuels to renewable energy. He wasn’t against it: they just need more power, period.
“We’re all of the above. I mean, we need it all,” Bell said.
Professor Ed Anderson of the University of Texas at Austin specializes in energy supply chains. He tells Lone Star Politics that Texas will be in a vulnerable situation for years to come when it comes to energy supply, but consumers can help.
“You know, we’re just getting to what the grid can handle,” Professor Anderson said, “Normally, the worst time of the year is the summer… in the summer, everyone gets equally hot and the Transmission lines can’t transmit the same power.
Anderson says new grid-connected electric cars and heavy industry in the Permian Basin adding more electric equipment are “a big deal.”
All of this change is happening at once and he says, “Honestly, you’re going to see other projections that are lower or much higher, like doubling. And so one of the things that ERCOT has to manage is they just have to be a little bit active on the conservative because he doesn’t know what will happen.”
Anderson says Texans should worry about the resiliency and stability of the grid as we approach the hot summer. Consumers, he says, can do basic things like turn off air conditioning and other electrical appliances when they’re not at home. According to him, purchasing programmable thermostats and modern air conditioners will help the grid and also save on daily energy bills.
“It’s mostly above our heads,” Anderson said, but “if we all work together” the Texans can help the grid stay stable.
An amazing update from ERCOT and solutions coming soon. NBC 5’s Phil Prazan and Gromer Jeffers with The Dallas Morning News talk to industry experts about Texas’ power grid.