Texas hits new peak demand record, but supply constraints will limit growth

Texas set a new record for electricity demand on July 22, and a new analysis says the state's grid, run by the Electric Reliability Council of Texas (ERCOT), could see peak demand climb to 120 gigawatts by 2030 — more than 30% above that record. But the same report, from Ascend Analytics, says the grid can't build new power plants fast enough to keep up. More than 80% of the huge new electricity users waiting to connect, mostly data centers and industrial facilities, likely won't have matching power supply in place by then. The culprits are shortages of gas turbines, long construction timelines, and backlogs in connecting new plants to the grid.

For homeowners, this points toward tighter electricity supplies and higher, more volatile prices in Texas over the next few years. Analysts expect wholesale power prices to rise in the near term as demand grows, before leveling off later as more renewable generation comes online. Natural gas plants are still expected to set prices during evening hours when solar power fades. The report also flags September as a riskier month for the grid, since earlier sunsets cut into solar output and evening wind tends to run lower than in August.

The broader issue is money: Texas's electricity market currently pays generators mainly through price spikes during shortages, rather than guaranteed contracts, and lenders are growing wary of financing new power plants and batteries without more certain revenue. That financing squeeze is one reason growth in new supply may lag behind the surge in demand.