Emissions reduction targets and cryptocurrency could double power demand and threaten the grid in West Texas by 2040.
That’s what Enverus Intelligence Research (EIR) said in a statement sent to Rigzone recently, which highlighted that the company released a report that quantifies the potential electrification of oil and gas assets in the Permian Basin based on operators’ emissions reduction targets and its impact on grid demand, transmission flows, and the generation required to serve this growing load.
One of the key takeaways from this report is that, with this increased load comes a need for additional generation buildout, otherwise power prices will rise significantly, EIR outlined in the statement.
EIR highlighted that another key takeaway is that, without an increase in levels of queued generation in ERCOT’s Far West load zone, EIR expects net exports to continue to decrease. This presents an opportunity for generation within the region to expand capacity to meet peak load and export to East Texas, EIR said in the statement.
A fundamental shift began in 2022 as load growth increased relative to wellhead gas production, EIR noted in the statement, pointing out another key takeaway from the report. This was due to early electrification efforts in the Permian Basin and a migration of cryptocurrency mining load to Texas following China’s crackdown on miners in mid-2021, the company added.
“We see Far West Texas power demand more than doubling by 2040 due to electrification trends and cryptocurrency mining growth,” Riley Prescott, a Senior Associate at EIR, said in the statement.
“We believe the Far West zone in ERCOT will see enough load growth to support significantly more renewable development without curtailments,” Prescott added.
“Within the next few years, the Far West will need a large power generation build-out to meet the forecast load growth. Without it, we expect power prices in the area will rise significantly,” Prescott continued.
“We believe that the low prices seen in the Far West could be disrupted by new load drivers including electrification of oil and gas assets and cryptocurrency mining growth,” Prescot went on to state.
Rigzone has asked ERCOT for comment on EIR’s statement. At the time of writing, ERCOT has not yet responded to Rigzone’s request with a comment.
In a release posted on its website last month, ERCOT announced that it had entered a new era of planning to meet future economic growth.
“With Texas experiencing continued economic and population growth, ERCOT … announced the need to adapt and plan differently to meet future electricity demand (load) on the grid,” the organization said in the release.
“ERCOT’s New Era of Planning focuses on ensuring all areas of system planning – from generation and load interconnections to transmission development – can adapt to better serve the needs of the rapidly growing Texas economy,” ERCOT added.
In the release, ERCOT President and CEO Pablo Vegas said, “as a result of Texas’ continued strong economic growth, new load is being added to the ERCOT system faster and in greater amounts than ever before”.
“As we develop and implement the tools provided by the prior two legislatures, ERCOT is positioned to better plan for and meet the needs of our incredibly fast-growing state,” he added.
In the release, ERCOT highlighted that there is now an estimated additional 40,000 megawatts of load growth by 2030 compared to last year’s forecast.
Back in January, ERCOT announced organizational changes to its executive team, adding that these changes “expand on the deep experience and knowledge of the ERCOT executive team to proactively manage the complexities of a rapidly transforming electric grid”.
“ERCOT requires focused, value-driven, timely, transformational changes to its tools, technology, and processes,” Vegas said in that release.
“Transformation necessitates innovation, and these organizational changes will continue to position ERCOT as a leader in the electric industry,” he added.
“Our responsibility to all Texans is to ensure we continue to maintain a reliable and resilient grid now and in the future. These organizational changes will support ERCOT’s continued mission to implement solutions for the challenges our industry faces and position us to meet this responsibility,” Vegas continued.
As part of the changes, Jayapal Parakkuth was named Senior Vice President and Chief Information Officer, Venkat Tirupati was promoted to Vice President, DevOps and Grid Transformation, Sean Taylor assumed the Senior Vice President, Chief Financial Officer, and Chief Risk Officer role, and Adam Martinez was named Vice President of Enterprise Risk and Strategy.
To contact the author, email andreas.exarheas@rigzone.com
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