How much power will artificial intelligence facilities consume over the long term? How should the state’s principal grid operator handle that demand? Will enough generation show up to meet it? The ERCOT organization and state regulators continue grappling with these question and others.
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Power hungry data centers and crypto mining operations continue attracting attention from the state’s power grid operators, and many serious questions remain.
How much power will artificial intelligence facilities consume over the long term? How should the state’s principal grid operator handle that demand? Will enough generation show up to meet it? The ERCOT organization and state regulators continue grappling with these questions and others.
Here’s a quick summary of developments related to some of these difficult challenges.
Senate Bill 1929
The grid operators at ERCOT have focused significantly more attention on data centers and crypto mining loads ever since the adoption of Senate Bill 1929 in 2023. Under the law, ERCOT is to collect data from large flexible loads —that is, data center and crypto mining loads. The legislation also creates more reporting requirements for crypto miners. ERCOT likewise established in 2022 the Large Flexible Load Task Force that reports directly to the ERCOT Technical Advisory Committee. This task force provides policy recommendations relating to the integration of large flexible loads into the ERCOT System and issues an update on large load interconnections each month.
Overall, however, ERCOT still does not possess as much data as it would like on these loads — one of ERCOT’s staff members acknowledged as much during a recent meeting of the Technical Advisory Committee— and the grid operator also lacks a financial model to show how large loads operate in response to market initiatives.
How much Demand to Expect?
ERCOT’s CEO Pablo Vegas has discussed on multiple occasions the anticipated extreme load growth expected in the planning horizon, including from data center, crypto mining, and more predictable industrial and oil and gas expansion. ERCOT had previously estimated overall generation capacity would need to grow from 85 gigawatts to 110 GW, but now it has raised that estimate to approximately 158 GW by 2030 because of new unanticipated demands from artificial intelligence data centers and crypto operations.
ERCOT also indicated in its July Permian Basin Reliability Plan Study Report that, by 2030, Transmission and Distribution Service Providers anticipate approximately 24 GW of load in the Permian Basin region, including 12 GW of oil-and-gas-related load and another 12 GW of additional load largely attributable to data centers, crypto mining, and hydrogen electrolysis facilities. Still, it seems that ERCOT does not fully understand the scope of data center development, so load across ERCOT and the Permian Basin region may be much larger than anticipated. There may be more legislation surrounding these large loads and data centers filed during the upcoming session in 2025.
But either way, the state faces a resource challenge in the long term to meet the anticipated 158 GW across ERCOT by 2030. In the short term, power usage has been alleviated by solar and battery development. While it seems that peak power in the summer is not as much of a concern, ERCOT has indicated there is still a winter peak power issue. There also does not seem to be a comprehensive plan to accommodate the anticipated 65 GW of new load growth by the end of the decade, although the Public Utility Commission is trying to address load growth and potential transmission constraints through the Texas Energy Fund. You can find more information about the TEF here.
Controllable Load Resources
Also, some large loads are trying to participate in the ERCOT market as Controllable Load Resources (CLR). These CLRs may participate in ERCOT’s real-time energy market through Security-Constrained Economic Dispatch, wherein they can submit bids to buy power up to a specified level and are instructed by ERCOT to reduce load if wholesale market prices equal or exceed that level. These demands from data centers and crypto mining will significantly change ERCOT’s load profile.