Texas power sector seeks 'real' load behind AI hype

: Electricity
26/03/25

Texas' power industry is scrambling to determine how much electricity data center growth will actually require, warning that without credible forecasts the state risks wasting billions of dollars on unnecessary infrastructure and saddling customers with sharply higher bills.

"I don't think there's a lot of confidence in the numbers that are out there now," Thomas Gleeson, chairman of the Public Utility Commission of Texas (PUCT), told a panel at CERAWeek by S&P Global in Houston, Texas, Wednesday.

"When you don't know what is real, you really don't know how to build the infrastructure for it," he said

Texas grid operator ERCOT has forecasted up to 250GW of peak demand by 2030, but industry officials on the panel said those figures are widely understood to be inflated by speculative interconnection requests that obscure the amount of load that will materialize. Developers and utilities described queues crowded with "ghost" applications from land speculators seeking free options on power, making it difficult for system planners to separate genuine demand from noise.

Retail electricity provider and power generator Vistra sees Texas' load growth likely to run around 5pc a year through at least 2030, a figure that is still "astounding" given how flat demand had been for decades, said senior vice president of regulatory policy J. Arnold Quinn. Even though that 5pc is far lower than the triple-digit forecasts circulating in the market, sustaining even 5pc annual growth will require market reforms to support new generation and grid upgrades, he said.

To get a truer sense of demand, data-center developers Crusoe and Vistra said they are incorporating other data onto the traditional forecasting process, including semiconductor shipment forecasts, hyperscaler capital spending disclosures and early-stage data-center construction tracking. Because AI load is constrained by how many chips the supply chain can actually deliver and by what cloud providers are financially committing to build, panelists at the conference said those metrics offer a more realistic ceiling on how much new demand Texas will need to serve over the next decade.

Texas regulators are weighing new interconnection rules that would require customers seeking to connect 75 MW or more to show real financial commitment before securing a place in ERCOT's queue. The proposed process would impose stricter financial security requirements to prioritize less-speculative projects, which panelists agreed should help thin out the queue.

"That should start to trim down this ghost-load problem and get us closer to reality," said Crusoe co-founder and chief strategy officer Cully Cavness.

By Jasmina Kelemen

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

26/03/25

Germany presents new climate action programme

Berlin, 25 March (Argus) — Germany's cabinet today presented a climate action programme with a strong focus on renewable power and industry electrification, encompassing 67 measures designed to cut greenhouse gas (GHG) emissions by 27mn t/yr of CO2 equivalent (CO2e) until 2030, although the country's climate experts warned that it is unlikely to achieve these reductions. The measures will plug the 25mn t CO2e annual reduction gap flagged in last year's official forecasts, environment minister Carsten Schneider said. The forecasts have since been superseded by data presented by federal environment office UBA earlier this month indicating a 42mn t/yr CO2e gap. The main drivers of the action programme are additional tenders for onshore wind power capacity over 12GW, and an extra €2.9bn of subsidies for industry electrification projects. The additional wind installations are expected to achieve emissions reductions of 6.5mn t CO2e in 2030 and lower wholesale power prices by €6/MWh, Schneider said. The majority will be installed in the relatively wind-poor but energy-hungry south of the country, or in priority areas, so it will not be affected by potential future legislation limiting grid access, Schneider said. Industrial electrification subsidies are expected to lead to emissions reductions of 4.3mn t CO2e in 2030. And Schneider stressed that his ministry expects the transport and buildings sectors, which have been lagging behind in recent years, to accelerate decarbonisation in the late 2020s. A €3bn subsidy scheme with income-based support will allow for the purchase of about 800,000 electric vehicles, leading to emissions savings of 1mn t CO2e in 2030. And the government expects the planned road transport GHG reduction quota now under parliamentary scrutiny to yield emissions reductions of 6.3mn t CO2e in 2030, while funding for new heat grids will save 2.3mn t CO2e in 2030. Germany's land use, land use change and forestry (LULUCF) sector will receive €4.7bn across 23 measures including the rewetting of peatlands and conversion of forests, although the effects will be felt mainly after 2030, Schneider said. Proposals by the economy ministry , which would take pressure off fossil fuel heating systems, are likely to be counterbalanced by the current energy crisis, Schneider said, as homeowners buying a new heating system are now likely to think differently about investing in another gas-fired system. The climate action plan will make Germany "more modern and more independent of oil and gas", Schneider said, reducing its natural gas consumption by almost 7 bcm³ in 2030 and its petrol consumption by about 4bn litres — down by 9pc on current annual levels, Schneider said. The government was legally obliged to present a climate action programme under the country's climate action law, and it must also be scrutinised by parliament. Germany aims to cut its emissions by 65pc in 2030 compared with 1990 levels. They stood 48pc below 1990 levels last year. The country's council of experts on climate change ERK, tasked with scrutinising the programme, said today that it lacks novelty and ambition and is unlikely to achieve the expected reductions. The ERK, which said it was commenting subject to a more detailed review, criticised the government's strong focus on the energy sector and its insufficient relief for households on low and middle incomes, particularly in the heating sector, even though the need for social measures to accompany climate change policy will continue to grow. The ERK urged the government to look at more innovative measures such as "white certificates" for energy efficiency or a bonus-malus system for cars. It is "questionable" whether the programme's measures "adequately" address the challenge of restructuring Germany's fossil fuel-dependent "capital stock", Potsdam Institute for Climate Impact Research chief economist Ottmar Edenhofer said. It lacks "credible" policy instruments providing "clear incentives" to switch to technologies such as electric cars or heat pumps, added Edenhofer, who is also chair of the European Scientific Advisory Board on Climate Change. Germany's solar association BSW flagged the "gap between aspiration and reality", given the economy and energy ministry's plans to axe support for small-scale rooftop solar systems. And German wood industry association HDH warned against restrictions to forestry management, which it said will limit the supply of raw materials for climate-friendly timber construction. Environmental group DUH announced it will once again sue the government for the programme unless it is improved, particularly regarding the transport sector. DUH won a case against the government's previous climate action programme in January . The climate action programme stands on "shaky ground", think-tank Agora Energiewende director Julia Blaesius warned, given that it is based on outdated data and in light of planned legislation changes. Blaesius emphasised the importance of a "reliable" carbon price to provide planning and investment security to households and companies, as well as revenues for Germany's climate and transformation fund, which finances much of the programme's measures. By Chloe Jardine Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Behind-the-meter buildouts hurt grid: AWS, Dominion

26/03/24

Behind-the-meter buildouts hurt grid: AWS, Dominion

Houston, 24 March (Argus) — The surge in behind-the-meter (BTM) power generation reflects a grid and interconnection system failing to keep pace with demand and stands in the way of efforts needed to rehaul the grid, industry speakers told a panel today. "If you look at a lot of the development that's happening now, more and more of it's going behind the meter, and that's a bad outcome for the industry," Amazon Web Service (AWS) vice president Kerry Person told a panel at CERAWeek by S&P Global in Houston, Texas. "Players are taking energy generation into their own hands because the system is not keeping up." As demand for artificial intelligence (AI) surges, more data-center developers are building their own on-site generation rather than relying on the grid because they cannot get connected fast enough through the traditional interconnection process. The private power plants risk locking in expensive, high-emissions infrastructure instead of pushing investment into proper grid upgrades, renewables, and demand-response initiatives, panelists said. "Grid-connected is always better," said Dominion Energy Virginia president Ed Baine. "It's better for the customer who was thinking about building on-site generation. It's better for the collective customers on the grid." The shift toward self-supply makes it harder for utilities to implement demand-response mechanisms that several panelists described as one of the best potential tools for easing grid stress. Data centers rarely run their facilities at full peak load, meaning they could reduce consumption or switch to backup resources when the grid is strained. Demand-response measures only work if loads are integrated into the system and visible to operators. While the technology exists to enable such coordination, today's market rules do not incentivize data centers and other large consumers to curtail load. Additionally, regulations tightly control when operators can use their own generating equipment and do not allow them to determine when to switch to back-up, making many of them unwilling to reduce their load. If the wealthiest companies decide to go on their own and build private power plants, it undermines a collective push for regulatory overhauls that could improve efficiencies. These private power plants are meant to be temporary "bridge" solutions, but once these BTM, fossil fuel-fed plants have permits and sunk costs, they risk becoming permanent and intensifying a growing community backlash against data center development, said Schneider Electric president Aamir Paul. Of the 40GW of BTM power projects that Schneider Electric is tracking, 80pc of them say they intend to connect to the grid and 20pc are saying they will remain off-grid. BTM solutions have included natural gas turbines, diesel generators and even repurposed aircraft engines, said Paul. "You know people aren't going to be excited about that, right?" said Paul, noting that these alternatives could further stoke public outcry from local residents. "The islanded-forever, fossil-fuel intensive solution is not practical or good." By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Sungrow, CRRC to provide tech for Kenya green NH3 plant

26/03/24

Sungrow, CRRC to provide tech for Kenya green NH3 plant

London, 24 March (Argus) — Chinese electrolyser manufacturers Sungrow Hydrogen and CRRC Zhuzhou have secured electrolyser supply contracts for the first phase of a geothermal-powered hydrogen and ammonia project in Olkaria, Kenya, developed by Chinese firm Kaishan Group. Kaishan signed a steam supply agreement with state utility KenGen in October 2025, under which KenGen will supply steam from existing geothermal wells for Kaishan to generate 165MW of electricity to power the electrolysers. Chinese firm Wuhuan Engineering is serving as engineering, procurement and construction contractor. Works on the site began in November 2025. Sungrow will supply 16 alkaline electrolysers rated at 1,000 Nm³/h each, while CRRC will provide eight units of the same rating, giving phase 1 a combined capacity of 24,000 Nm³/h, or around 120MW. This is sufficient to produce roughly 19,000 t/yr of hydrogen assuming continuous operation, which will be converted to the 100,000 t/yr of ammonia planned for phase 1. Kaishan plans to scale to 200,000 t/yr of ammonia at full build-out, with output processed into 480,000 t/yr of green fertilisers comprising 180,000 t/yr of urea and 300,000 t/yr of calcium ammonium nitrate. Kenya's government will offtake the fertiliser for distribution to local farmers to reduce import dependence. Total investment stands at around $800mn, with annual revenues projected at $220mn-250mn over a 25-year operating life, Kaishan said previously. Geothermal power offers a significant advantage for electrolytic hydrogen production, with capacity factors of around 90pc enabling near-continuous baseload operation without the intermittency or energy storage costs associated with solar and wind. Kenya's energy department estimates the country holds 10GW of geothermal potential, with only around 950MW of installed capacity to date. Chinese electrolyser makers have been increasing their equipment exports in recent months, supplying to projects in Europe, Middle East and Asia-Pacific. Sungrow delivered 160MW of alkaline electrolysers to Acme's green ammonia project in Oman , a 3MW containerised PEM system for Italy's MW-scale solar-to-hydrogen project , and a containerised alkaline system to a green hydrogen blending project in Brazil. By Chingis Idrissov Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Kazakhstan approves $15.5bn national coal power plan

26/03/24

Kazakhstan approves $15.5bn national coal power plan

London, 24 March (Argus) — Kazakhstan has approved plans to increase its coal-fired power generation through projects estimated at around 7.5 trillion tenge ($15.5bn) through to 2030, President Kassym-Jomart Tokayev said. Tokayev approved the plans after assigning coal-fired power generation a national project in January. These include the commissioning and renewal of coal-fired units to add 7.8GW of capacity. The country also plans to build eight new thermal coal-fired power plants, including its largest 2.64GW facility in Ekibastuz. Thermal power plants would also be built in Kurchatov (700MW) and Zhezkazgan (500MW), as well as in the Kokshetau, Semey and Ust-Kamenogorsk regions. Older thermal coal-fired power plants, such as the 1GW Ekibastuz-2 and 2.5GW Aksu power plants, and the Karaganda-1 power station, will be modernised to reduce energy shortages. Kazakhstan expects the projects to create additional thermal coal demand of about 20mn t/yr by 2030. The project is expected to be a collaboration between the mining and transportation sectors. The project will also expand the fleet of gondola rail cars by 600 units/d, modernise railway infrastructure and introduce tariff corridors for the transportation of fuel for domestic needs. Kazakhstan had initially drafted the plan to increase its coal-fired power generation in early February. The country will likely need to rapidly increase coal production. Output fell by 6.2pc on the year to 18.22mn t in January-February, official data show. The country produced 115.9mn t of thermal coal in 2025, about 6.5pc higher on the year on growing domestic consumption and rising export potential. By Shreyashi Sanyal Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

EIB to lend Vietnam’s Techcombank €200mn for climate

26/03/24

EIB to lend Vietnam’s Techcombank €200mn for climate

London, 24 March (Argus) — The European Investment Bank (EIB) has agreed a €200mn ($232mn) long-term financing facility with Vietnamese bank Techcombank, to drive climate action and environmental projects across Vietnam. The financing will support projects implemented by the private sector in Vietnam. It aims to "bridge the financing gap for green initiatives", the EIB said. The funding will allow Techcombank to increase lending for renewable energy, energy efficiency and sustainable transport projects. The EIB will also work with Techcombank "to strengthen its climate risk management framework, improve climate-related disclosures and support the implementation of the operation", the former said. Techcombank delivered 16.4 trillion Vietnamese dong ($622mn) in "green lending" in 2024, it said. The funding will support the just energy transition partnership (JETP) that Vietnam signed in December 2022 , the EIB said. Vietnam signed the JETP with the EU, UK, France, Germany, the US, Italy, Canada, Japan, Norway and Denmark, but the US withdrew in early 2025. The JETP aimed to mobilise $15.5bn in public and private finance to support Vietnam's goals to reach net zero greenhouse gas emissions by 2050. The country incorporated the JETP into its power plan, which sets out goals to ramp up renewable energy capacity. The share of coal-fired power in Vietnam's electricity generation mix was 44.8pc in 2023, IEA data show. The EIB is the EU's lending arm and is owned by EU member states. It is classed as a multilateral development bank (MDB). Countries often call on MDBs to do more to address climate change, as the institutions have significant leveraging power. Several key donors of international development aid have scaled back or announced cuts to funding in the last 18 months, which is likely to affect projects tackling climate change in developing nations. Governments and campaigners have shifted their focus to MDBs and the private sector, in lieu of public funding. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Argus Carbon

Carbon price benchmarks, policy and project news, and deep analysis, on a daily basis.

Argus Low Carbon Hydrogen Strategy Report

Part Three: Americas. An in-depth analysis of the key sectors, countries and policies enabling hydrogen growth.

Argus Hydrogen and Future Fuels

Costs, prices, news and analysis for the hydrogen and P2X sectors

Argus LNG Daily

Access the latest LNG spot price assessments, market news and independent analysis.

Argus North American Natural Gas Forward Curves

Independent market valuation tool to support investment and trading decisions on North American natural gas markets.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more