Wichita Falls, Texas On Tuesday, five Energy Advisory Services specialists discussed the future of the Texas power system, including market concerns, energy costs, and how long ERCOT’s run may last.
Three representatives who led today’s webinar reviewed ERCOT’s summer performance, highlighted recent adjustments, and provided a reality check on the challenges ahead.
“What we want to do here is sort of investigate what is going on. “How long will these somewhat good times last?” Five Energy Advisory Services President and CEO Brian Hayduk asked.
The panel began by examining the Texas electricity grid in further detail.
Five energy advice experts stated that natural gas, wind, and solar are still the state’s top three energy sources. They then went over the history of power generation in Texas, year by year, dating back to 1999.
With the supply-side picture in place, the focus switched to demand.
“This is ERCOT’s Load Forecast Inclusive of TDSP Large Editions, so if a large load wants to connect to the grid, the first place they start is with your TDSP provider,” Five Energy Advisory Services Senior Market Analyst & Zoltar Abby Grasshoff explained.
Experts expect that Texas’ electricity grid will grow by between 94 to 218 gigawatts during the next six years.
More AI data centers are opening around the state, which is a major driver of this expansion.
For regular Texans, it might put additional strain on local utilities such as Oncor, which serves Wichita Falls homes, potentially hurting both reliability and monthly prices.
While the impact on market prices has been extensively monitored, the most significant movements have occurred during the summer months in recent years.
“Back in 2022, soon after Russia invaded Ukraine, natural gas prices were sky-high, averaging $789 for the summer, with prices hovering around $145. Fast forward to 2023, and the story was drastically different.
Natural gas was substantially cheaper, and by May, wholesale prices were approaching $51. Over the last four years, these have been the high and low marks for wholesale electricity as summer approaches. The following year, prices rose again, reaching as high as $110 before settling around $92 in May.
“This year, after a relatively mild summer in 2024, prices were a little lower, just under $100 early in the season and closer to $74 by the end of May,” FEAS Chief Risk Officer Eric Bratcher explained.
One advantage, according to officials, is that the majority of the increased load is not expected until 2026 to 2028, which means that the Texas system may experience some calm over the next one or two summers.
