The organization’s CEO said a change in ERCOT’s forecasting methodology — combined with more Permian Basin oil production and an influx of new data centers and Bitcoin operations — had led to higher demand forecasts.
________________________________________________
Find out more about ERCOT in this glossary and primer, created in 2022 by the Oncor Cities Steering Committee.
An expected influx of industrial facilities — combined with a changing methodology for predicting energy demand — is driving a dramatic spike in the state’s electricity forecasts, according to recent comments by ERCOT’s executive director.
During an April 23 appearance at its board of directors meeting, Electric Reliability Council of Texas CEO Pablo Vegas said the organization now expects to serve up to 152 gigawatts in peak demand by 2030. That’s 40 GW more than the amount forecast by the organization just last year, and well above the all-time peak of 85.5 GW set in August of 2023.
Vegas said a change in ERCOT’s forecasting methodology — combined with more Permian Basin oil production and an influx of new data centers and Bitcoin operations — had led to the higher forecasts. “New load is being added to the ERCOT system faster and in greater amounts than ever before,” he said.
THE BACKGROUND
Vegas pointed specifically in his presentation to the implementation of House Bill 5066, from the 88th Texas Legislature, as driving some of the higher numbers. Under HB 5066, ERCOT must now include in its transmission planning projections loads identified by Transmission Service Providers at the local level. As a result, ERCOT counts more industrial load such as crypto-mining and data center operation in its forecasts. Such load can go from drawing board to completion in comparatively short order.
Pablo Vegas, New ERCOT CEO
Vegas said one key challenge for ERCOT as it prepares for the expected load growth is that generation companies often site new units far from areas with the greatest demand. As such, Vegas emphasized the need for better transmission planning, and the need for greater visibility in system planning at the local distribution level. “We need to accelerate aspects of our planning processes and be able to look further into the future, anticipate what’s coming, because it still takes three to six years to build transmission,” he said.
Vegas also called for ERCOT to pursue a continuous transmission planning process, as opposed to its current practice of conducting planning activities on an annual schedule. He explained that this transmission planning paradigm shift may take several years, but that the Texas Legislature has given ERCOT the resources necessary to proceed.
Finally, Vegas noted that 4,000 megawatts of natural gas and energy storage resources began operations last year, with 7,000 MW expected to begin operations this year. Nevertheless, the bulk of planned generation interconnections are solar and battery storage, according to data he provided.