Texas is getting ready for an all-time high power demand next week as a spring heat wave pushes residents and businesses to crank up their air conditioning. The state’s electric grid operator, the Electric Reliability Council of Texas (ERCOT), is predicting significant increases in power usage due to the rising temperatures.
After severe storms hit the Houston area on Thursday, resulting in at least four fatalities and leaving 800,000 homes and businesses without power, Houston is expected to experience a sharp rise in temperatures. Highs are projected to increase from 82 degrees Fahrenheit to the low to mid-90s from May 18 to 29, compared to the usual high of 86 degrees Fahrenheit for this time of year.
ERCOT is expecting a substantial surge in electric demand, with estimates of 71,893 megawatts (MW) on May 20, 72,725 MW on May 21, and 74,346 MW on May 24. These numbers surpass the previous May record of 71,645 MW set in 2022. The highest peak on the grid was 85,508 MW on Aug. 10, 2023. Analysts believe that power usage might surpass this all-time peak during the summer due to economic growth, population increase, and higher demands from data centers, artificial intelligence, and cryptocurrency mining operations.
On a typical day, one megawatt can power roughly 800 homes under normal circumstances, but this number can drop to as low as 200 homes on extremely hot days in Texas.
ERCOT had previously cautioned about a potential emergency situation due to a lack of reserve capacity for this weekend. However, the cooler weather post-storms has reduced the immediate risk, and additional capacity is no longer necessary 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 is in comparison to an average of $30 per MWh so far this year, $80 in 2023, and $66 over the past five years. Furthermore, day-ahead prices spiked to $688 per MWh for one hour late on Friday.
As Texas gears up for heightened power demand, ERCOT and residents will be closely monitoring the grid’s performance to ensure stability and prevent outages similar to those experienced during the freeze in February 2021.
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