Houston Daily

Power demand is rising quickly in Texas, according to new research from the University of Houston. The study, titled “The Future of the Electric Grid in Texas: Opportunities and Challenges in the Next Decade,” was coauthored by Ramanan Krishnamoorti, UH Vice President of Energy and Innovation, and researcher Aparajita Datta.

The report warns that electricity needs in Texas could double by 2035 due to several factors. These include the rapid growth of data centers across the state, increased use of electric vehicles, industrial adoption of decarbonization technologies, demographic changes, and higher temperatures. If electrification continues without limits, demand could even quadruple within a decade.

Researchers say that without major upgrades to power plants and supporting infrastructure, Texas may face electricity shortages and higher costs for consumers. The grid could become more stressed as demand increases. The current energy mix in Texas consists of 40% natural gas, 29% wind, 12% coal, 10% nuclear, and 8% solar.

“Texas, like much of the nation, has fallen behind on infrastructure updates and the state’s growing population, diversified economy and frequent severe weather events are increasing the strain on the grid,” Datta said. “Texas must improve its grid to ensure people in the state have access to reliable, affordable and resilient energy systems so we can preserve and grow the quality of life in the state.”

If no action is taken to expand capacity, researchers estimate an annual shortfall of up to 40 gigawatts by 2035. A more likely scenario would see a shortfall around 27 GW.

“The effects range from disruptions to daily life and essential services, such as water and transportation, to the loss of life.”

— Aparajita Datta, Researcher, University of Houston

“We have seen this happen in the past. Take, for example, the widespread and long power outages during Winter Storm Uri,” Datta said. “The effects range from disruptions to daily life and essential services, such as water and transportation, to the loss of life.”

The report also notes that natural gas demand within Texas might double or triple if it becomes a key resource for meeting future energy needs while supporting industrial decarbonization efforts. This could tighten domestic supply further as liquefied natural gas exports increase.

In addition to electricity concerns, researchers highlight a possible statewide water deficit caused by both electricity generation requirements and cooling needs at data centers. By 2035 this deficit could reach about three million acre-feet (3,600 million cubic meters). Rising municipal water use adds urgency for new infrastructure investments.

“As we see the growth of data and artificial intelligence (AI) centers, much of the increase in water demand, similar to electricity, is coming from regions in the state that were previously not considered significant demand centers,” Datta said.

She added that these regions are mostly rural areas such as West and North Texas but lack sufficient transmission lines or natural gas pipelines needed for large-scale development.

While demand grows rapidly—360 gigawatts worth of solar and battery projects remain stalled in ERCOT’s interconnection queue—new gas plants have faced delays due to supply chain problems along with policy uncertainties.

Recent legislative measures are aimed at addressing some issues. Senate Bill 6 was signed into law by Governor Greg Abbott in June; it includes requirements for large users like data centers regarding load management as well as clearer rate structures.

“Vulnerable communities are usually the worst-impacted,” Datta said. “While these provisions are a step in the right direction, Texas needs more responsive and prompt policy action to secure grid reliability, address the geographic mismatch between electricity demand and supply centers and maintain the state’s global leadership in energy.”