Summary: Commercial electricity demand in Texas is increasing significantly as computing facilities bring more sites to operate in the Lone Star State. ERCOT projects Texas to see an increase in commercial energy demand for at least the next 6 years and delays in new power generators, electricity rates are expected to continue climbing at least for the short term.
The U.S. Energy Information Administration announced that Texas had the second largest growth in commercial electricity demand in the United States-- 13,000,000 kWh of electricity was sold in 2023 in Texas alone. Virginia had the largest growth at 14 billion kWh of electricity sold.
EIA reports that computing facilities are the main drivers of the new increase in commercial electricity demand. Data centers and cryptocurrency mining operations use a significant amount of energy.
Since Texas has low costs for land and cheaper electricity through deregulation, computing facilities are attracted to bring operations to Texas. ERCOT released a report in April that they expect electricity demand to increase continuously up to 2030-- This caused a huge spike in electricity rates as traders consider that Texas' energy production is near ceiling with many of the new power generation projects seeing delays in opening.
Renewable energy has taken a more significant role to meeting the electric demands in Texas; however, it's heavily dependent on the weather and has caused the energy market to be even more volatile than where we've been for the last 2 years.
The Fourth Day Energy team recommends securing a long term energy order to protect yourself from the increasing costs in electricity. Reach out to us today if your electric rate expires within the next 2 years so we can begin working on a strategy tailored to your business.
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