Texas grid operator sees plentiful supply 2025-2029, but surging load could eliminate surplus

The Electric Reliability Council of Texas on May 24 issued a report showing its expected resources would exceed expected peakloads by 46% in 2025, more than triple the 13.75% target planning reserve margin, and reserve margins would range from about 55% to 64% 2026 through 2029.

However, ERCOT's May Capacity, Demand and Reserves Report noted that potential load increases could slash those reserve margins to negative numbers by 2029.

ERCOT North Hub on-peak forwards moved little for those years on the Intercontinental Exchange on May 24. For example, ERCOT North Hub June 2026 and calendar year 2027 forwards were down 1.2% and 2.3%, respectively.

The 46% planning reserve margin for summer 2025 in the May CDR was down 0.7% from the December CDR estimate for summer 2025.

"This decrease is due mainly to delays of planned projects -- mostly solar -- that were previously expected to be in service by July 1, 2025," ERCOT said. "When including new contracted loads, the reserve margin drops to 36.4%. The reserve margin rises to 58.2% for summer 2026, reflecting the planned solar capacity delayed to 2026. With new contracted loads, the summer 2026 reserve margin drops to 38.2%. By summer 2029, the reserve margins without and with new contracted loads are 54.8% and 24.2%, respectively."

Legislative load impact

However, the 88th Texas Legislature in spring 2023 passed House Bill 5066, requiring ERCOT to modify its transmission planning criteria to include forecast load without signed interconnection agreements. Including these resources, the planning reserve margins would drop to 33.9% in 2025, 23.7% in 2026, 12.8% in 2027, minus 2.4% in 2028 and minus 4.3% in 2029.

ERCOT forecast the following base summer peak demands and firm peak demands after deducting rooftop solar, energy efficiency and load-management programs:

• 2025: base: 83.3 GW; firm: 79.2 GW
• 2026: base: 84.2 GW; firm: 79.5 GW
• 2027: base: 85 GW; firm: 79.7 GW
• 2028: base 86.6 GW; firm: 84 GW
• 2029: base 88.1 GW; firm 85.5 GW

The load forecast counts as load reductions all incremental rooftop solar installations hitting a high of 2.6 GW in 2027, but counts these as zero thereafter, as the system peak hour is forecast to shift later in the day, near sundown, Pete Warnken, ERCOT senior manager for resource adequacy, said during an ERCOT Supply Analysis Working Group meeting May 24.

However, the supply forecast counts utility-scale solar as expected to be supplying 17.7 GW during peak demand for each year of 2025-2029 and expected solar additions would add another 28 GW by 2029.