By Scott DiSavino
As the Texas power grid operator anticipates a surge in electricity use on Tuesday, breaking all-time demand records, homes and businesses are cranking up their air conditioners to combat a heat wave sweeping across the state.
With Texas experiencing rapid population growth and serving as a hub for energy-intensive industries like data centers and cryptocurrency mining, the demand for power has skyrocketed, putting strain on the already fragile electrical grid.
After shattering peak-demand records multiple times earlier this year, Texas is projected to reach a peak power demand of 85,989 megawatts (MW) on Tuesday, surpassing the previous record of 85,508 MW set in August 2023, according to the Electric Reliability Council of Texas (ERCOT).
Despite the anticipated peak demand, ERCOT assures that the power network is operating normally and has ample supply to meet the expected load.
One megawatt of power can typically sustain 800 homes on a regular day, but during scorching summer days in Texas, it may only be enough for 250 homes as residents and businesses crank up their air conditioning units.
Temperatures in Houston, the state's largest city, are forecasted to soar to 103 degrees Fahrenheit (39 degrees Celsius) on Tuesday before slightly cooling down to 100 F (38 C) on Wednesday, well above the normal high of 95 F (35 C) for this time of year.
As a result of the increased demand, next-day power prices at the ERCOT North Hub, which encompasses Dallas, have surged by approximately 157% to reach a two-week high of around $102 per megawatt hour for Tuesday, based on LSEG pricing data.
Meanwhile, real-time prices in ERCOT spiked to nearly $1,600 per MWh during a 15-minute interval on Monday evening but have since dropped to a high of $32 per MWh on Tuesday.
Analysis:
The soaring demand for electricity in Texas, driven by a combination of population growth and energy-intensive industries, is straining the state's power grid. As a result, consumers can expect higher electricity prices and potential supply challenges during peak usage periods, particularly on hot summer days. It is crucial for residents and businesses to be mindful of their energy consumption and consider implementing energy-saving measures to mitigate the impact of rising power costs and grid instability.