Reports & Studies

Texas Grid Security: Natural Gas Critical for Reliability with Increasing Electricity Demand

Growth in new technologies like artificial intelligence (AI) and data centers, coupled with increasing populations and the electrification of industries, has driven up electricity demand in Texas with no signs of slowing down. In fact, electricity demand in Texas is expected to grow to 152 gigawatts by 2030, representing a historic 78 percent increase from current levels. Thankfully, natural gas is positioned to support the state’s energy needs for decades to come.

Published : June 2024

Related Key Terms:

Permian Basin
natural gas
electricity generation
Artificial Intelligence
data centers
energy demand

Table of Contents

Texas Grid Security (Pg. 1)

Texas is growing (Pg. 2)

Data Centers increase Power Demand (Pg. 3)

Powering the Lone Star State (Pg. 6)

Natural Gas (Pg. 7)

Grid Reliability (Pg. 8)

Natural Gas Delivers (Pg. 9)


Key Findings

TEXAS POPULATION IS GROWING: Texas experienced an approximate 1.7 percent annual electricity demand growth, aligning with the 1.6 percent population growth through 2022. Over 25,000 new businesses opened in Texas from 2010 to 2019.

TEXAS HAS BECOME A CENTRAL HUB FOR POWER-INTENSIVE SECTORS: The surging power grid demand is driven by factors such as the rise of AI, data centers, crypto mining and the electrification of a number of industries, including oil and natural gas operations.

DATA CENTERS AND AI ARE HIGHLY ENERGY-CONSUMPTIVE: U.S. data centers will strategically be placed near natural gas basins, and Texas has become one of the most attractive U.S. states for this growing industry, in large part due to its welcoming business environment and its flourishing natural gas production, thanks to the prolific Permian Basin.

TEXAS HAS A BALANCED ELECTRICITY GRID: Natural gas and renewables account for approximately 45 percent and 40 percent, respectively, of the state’s energy grid. This balance provides a reliable baseload and the ability to quickly ramp up natural gas-generated electricity when renewable resources are unavailable.

NATURAL GAS IS ESSENTIAL FOR DISPATCHABLE POWER: Solar and wind technologies face challenges due to limited storage capacity and their intermittent nature. Texas requires dispatchable, reliable power—like natural gas—that can be activated at any moment to support surges in demand, especially during severe weather events. During the recent solar eclipse in April 2024, natural gas was crucial in compensating for the drop in solar generation in Texas.

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