Texas is bracing for a record-breaking power demand next week as a spring heat wave drives residents and businesses to ramp up air conditioning usage. The state’s electric grid operator, the Electric Reliability Council of Texas (ERCOT), projects significant increases in power consumption due to rising temperatures.
Following severe storms that hit the Houston area on Thursday, leaving at least four people dead and 800,000 homes and businesses without power, temperatures in Houston are expected to rise sharply. Highs are forecasted to jump from 82 degrees Fahrenheit to the low to mid-90s from May 18 to 29, compared to the normal high of 86 degrees Fahrenheit for this time of year.
ERCOT forecasts electric demand will increase dramatically, with projections of 71,893 megawatts (MW) on May 20, 72,725 MW on May 21, and 74,346 MW on May 24. These figures surpass the previous May record of 71,645 MW set in 2022. The grid’s all-time peak was 85,508 MW on Aug. 10, 2023. Analysts anticipate that power use may break this all-time peak during the summer due to economic and population growth, as well as increased demand from data centers, artificial intelligence, and cryptocurrency mining operations.
Typically, one megawatt can power around 800 homes under normal conditions, but this number can drop to as few as 200 homes on extremely hot days in Texas.
ERCOT had previously warned of a potential emergency condition due to reserve capacity deficiency for this weekend. However, the cooler weather following the storms has mitigated the immediate risk, and additional capacity is no longer needed for Friday and Saturday.
In the energy market, next-day power prices at the ERCOT North Hub, which includes Dallas, surged to a one-week high of $120 per megawatt hour (MWh) for Friday, up from $40 on Thursday. This compares to an average of $30 per MWh so far this year, $80 in 2023, and $66 over the past five years. Additionally, day-ahead prices soared to $688 per MWh for one hour late on Friday.
As Texas prepares for increased power demand, ERCOT and residents will closely monitor the grid’s performance to ensure stability and prevent outages reminiscent of the February 2021 freeze that caused widespread disruptions.