ERCOT CEO Pablo Vegas outlines alternative forecasting methodology that projects big load forecasts, but less than previous predictions.
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Pablo Vegas, New ERCOT CEO
ERCOT CEO Pablo Vegas, in presentations this month to key state legislative committees, has released long-term energy consumption forecasts that have been adjusted downward from previous projections. Despite the adjustment, however, ERCOT still forecasts an approximately 66 percent increase in power demand by 2031, according to Vegas.
Load Forecast – Why is it Necessary?
ERCOT relies on load forecasts for several reasons. First, the grid operator uses the forecasts to ensure the grid has sufficient generation to support the state economy and critical infrastructure. Moreover, ERCOT’s transmission planning efforts rely on load forecasts. Because generation and transmission construction often take several years, it is critical that ERCOT accurately forecasts load over long horizons.
Recent Changes in ERCOT Methodology
During meetings in April of the House State Affairs and Senate Business and Commerce committees, Mr. Vegas explained that to prepare its load forecasts, ERCOT historically has relied on two factors: (1) Texas’ base economic forecast, which considers economic growth, electric vehicle forecasts, and expansion of existing cryptocurrency; and (2) executed agreements between transmission service providers and prospective large load entities, such as data centers. However, after the adoption of House Bill 5066 in 2023, ERCOT added to that mix projected load additions based on the expectations of transmission and distribution utility officers.
This resulted in a significant increase in ERCOT’s load forecasts, Vegas explained. For instance, in the most recent forecast, ERCOT anticipated 218 gigawatts of load by 2031— more than double today’s 85 GW. This spike in energy demand is largely the result of projected data centers, which according to the transmission and distribution utility officer attestations, will require 86 GW by 2031.
Mr. Vegas Presents Alternative Forecast
Mr. Vegas cautioned that those forecasts may have inflated numbers and so ERCOT has pursued an alternative forecast methodology. Under this adjusted methodology, ERCOT delayed large load “in-service dates” by 180 days, reduced all data center demand by approximately 50 percent, and reduced increases identified in officer letters by roughly 55 percent. According to Mr. Vegas, ERCOT based these changes on historical outcomes.
With the adjusted methodology, ERCOT anticipates approximately 148 GW of load by 2031, with 22 GW from data centers. This forecast is still significant—indeed, it is 66 percent higher than peak load today.