Texas power grid faces rising demand as AI data centers fuel energy debate

As the summer continues to heat up, so are the discussions about the Texas power grid and the impact of data centers. Just last week, the grid set a new all-time demand record: more than 91,000 megawatts.

ERCOT says by 2032, the grid could see peak demand of 175,000 megawatts. That's nearly double the current record. The big reason for the estimate is the explosive growth of AI-driven data centers. 

Regulators told lawmakers this week they believe the grid can handle that growth, thanks in part to all the new solar power farms and battery storage facilities. But ERCOT also warned that solar and batteries alone won't be enough.

The grid operator says Texas will need more power sources capable of running around the clock, including natural gas plants.

"The mix that we're seeing today coming onto the grid is well over 90% made up of renewables and battery storage," said Pablo Vegas, the CEO of ERCOT. "If that continues, while load grows rapidly, we're going to get to a place where we have a lot more scarcity events."

The debate isn't just about power. This week, state Senators also questioned whether Texas should keep giving data centers billions of dollars in tax breaks. Some lawmakers are calling for the incentive to be scaled back or eliminated altogether.