The Electric Reliability Council of Texas (ERCOT) released a preliminary long-term forecast projecting demand could reach 367,790 megawatts by 2032, more than four times the state’s all-time peak of 85,508 megawatts, set in August 2023.

Last Wednesday, leaders of the Electric Reliability Council of Texas and the Public Utility Commission of Texas (PUCT) updated lawmakers in Austin following the grid operator’s issuance of a new long-term forecast.

ERCOT said the difference between near-term expectations and the 2032 figure reflects Texas’s continued economic growth, with new load being added to the system faster and in greater amounts.

ERCOT described the projection as a “preliminary snapshot” based on economic growth and a surge in new, energy-intensive customers being added to the grid.

Those large-load users, typically requiring more than 75 megawatts of power, include data centers, cryptocurrency mining operations, industrial facilities, and oil and gas development. ERCOT said those customers are being added: “faster and in greater amounts than ever before.”

Even so, ERCOT President and CEO Pablo Vegas said the forecast is likely higher than actual future demand.

“Texas is experiencing exceptional growth and development, which is reshaping how large load demand is identified, verified, and incorporated into long-term planning,” Vegas said. “As a result of a changing landscape, we believe this forecast to be higher than expected future load growth.”

Vegas said ERCOT plans to work with regulators to refine how it calculates long-term demand, particularly as large-load customers become a bigger part of the system.

Energy experts said the forecast reflects how many projects are being proposed, not how many will ultimately be completed.

“There’s just a whole lot of uncertainty around the system right now, which is not exactly what you want with the electricity sector,” said Joshua Rhodes, a research scientist at the University of Texas at Austin.

Much of that uncertainty is tied to the rapid growth of data centers, especially those supporting artificial intelligence, which require large amounts of electricity and are often built in concentrated areas.

He said the scale of proposed projects far exceeds what the grid can realistically support in the near term.

There’s just physically no way that we’re able to connect 200 gigawatts worth of data centers when our current grid only supports about 85 gigawatts of load,” Rhodes explained, saying many of the proposed projects are early-stage or speculative.

“Software scales, you know, copy paste, you’ve made a copy of like, your, you know, your software, but that’s not how the grid works, right?” Rhodes explained that the physical necessity of creating electric infrastructure is not as simple. “We’ve got to put concrete in the ground, and we’ve got to put steel in the ground, ” Rhodes said, “Lots of infrastructure has to go physically in the ground to be able to move more energy around, and we have to build the power plants to, you know, to make that energy.”

Rhodes used the Houston area as an explanatory point: “The Houston region is about 17 gigawatts worth of demand at peak. That’s about 20 of these new data centers,” but Rhodes explained these locations are often built in smaller geographic locations, placing a strain on local infrastructure.

“These 17-ish or 20-ish data centers aren’t spread out over all the area of Houston or DFW, but they’re concentrated in certain areas, which puts particular strain on that local infrastructure to supply that energy,” said Rhodes.

Building that infrastructure can take years and is already facing supply chain constraints and rising costs.

Rhodes said utilities that once handled a handful of large connection requests each year are now handling dozens, or even hundreds, at the same time.

ERCOT has acknowledged that shift and is moving toward studying projects in groups rather than individually as it works through a growing backlog.

Despite the uncertainty, Rhodes said demand is still expected to increase significantly.

“We are going to have a lot of data centers built. Demand is going to grow,” he said.

That growth is not limited to data centers. Texas is also seeing increased demand from population growth, electrification of vehicles and heating, and expanded manufacturing.

“All of these are competing for the same energy, the same power,” Rhodes said.

The rapid increase in demand is also raising questions about cost. Rhodes said electricity prices are likely to rise as utilities invest in new infrastructure and contend with higher material costs.

“We’re all clamoring after the same infrastructure, the same power,” he said.

State lawmakers have already taken steps to address reliability concerns. Recent changes allow grid operators to require large power users, typically those needing 75 megawatts or more, to reduce or shut down during emergencies.

“We want some of this load to come to the state,” Rhodes said, “but we want to make sure that the amount of power that we have for everyone else is still available.”

How much of the projected demand becomes reality will depend on which projects move forward, how quickly infrastructure can be built, and how regulators adapt to the rapid growth.