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Find About Outlook for Electricity in Texas
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The Outlook for Electricity in Texas

The Texas state demographer projects that the state's population will rise to more than 33 million in 2025, and more than 36 million in 2030. This growing population will create a rising demand for electricity in all sectors. Federal and state policies and market forces will determine how this demand will be met. <<<>>>

Texas has access to energy resources sufficient to meet its projected electricity demands through 2030 and beyond. Generating capacity is likely to be a bigger concern for Texas in the future. Projected Demand By 2030, the federal Energy Information Administration (EIA) projects that U.S. commercial demand for electricity will rise by 63 percent, residential demand will rise by 39 percent, while the industrial sector will rise by 17 percent. The increase in demand will be due not only to population growth, but also to increased disposable income, which spurs increased purchases of products and homes with additional floor space needing electricity. Historically speaking, energy demand and consumption are correlated to three factors: the state's economy and demography, which affect mid- and long-term variations in energy demand, and the weather, which affects short-term variations. ERCOT expects energy demand in its power region to increase by 39.4 percent from 2007 through 2025, from about 313 million megawatt-hours (MWh) to more than 436 million MWh, while peak demand is expected to increase at about the same rate, rising by 40.9 percent, to 89,883 MW in 2025 (Exhibit 27-16). ERCOT has set a target reserve margin of 12.5 percent for electricity generation capacity within its boundaries. The reserve margin is the amount by which capacity exceeds projected peak hourly load, which typically occurs on afternoons in July and August in the ERCOT region. 75 ERCOT projects that, given expected population and economic growth, the reserve margin will drop below the 12.5 percent target as early as 2008, though reserve margins will exceed 12.5 percent by 2009 if planned generation facilities come online. Meeting the growing demand for electricity in Texas will require new generation and transmission capacity. ERCOT projects $3.1 billion in spending on transmission lines from 2007 through 2011 and that another $3 billion will need to be invested from 2011 through 2016 in order to ensure adequate transmission capacity. 77 Substantial investments in new generating capacity also will be needed. In the longer term, increased energy efficiency and demand response may also act to limit consumption. Meeting Projected Needs According to EIA, coal-fired plants will continue to provide the nation's largest share of electricity for the foreseeable future, producing 57 percent of the nation's electricity by 2030, followed by natural gas (16 percent) and nuclear power (15 percent). 78 The projected fuel mix for Texas is different, however, due to our greater use of natural gas and the difficulty in building new Texas coal plants due to environmental issues. In Texas in 2006, 49 percent of generation came from natural gas, compared with 37 percent for coal. Meeting the growing demand for electricity in Texas will require new generation and transmission capacity. Lightblub.better.idea 1 summary