02/16/2026
Texas is on the cusp of a significant transformation in its electricity generation capacity, driven by surging demand from data centers, AI technologies, manufacturing, and population growth. Over the next 10 years (through approximately 2036), we anticipate a massive expansion of up to 100-200+ gigawatts (GW) of new capacity coming online. This includes:
• Renewables Leading the Way: Solar and wind projects are expected to dominate, with solar capacity potentially doubling in the short term and contributing over 50% of new additions. Battery storage will also surge, growing from about 15 GW in 2025 to 37 GW by 2027, helping to stabilize the grid during peak times.
• Natural Gas and Other Sources: Additional gas-fired plants, including large-scale facilities co-located with data centers, will provide reliable backup, adding tens of GW to ensure energy security.
These expansions are largely managed by ERCOT (the Electric Reliability Council of Texas), which oversees about 90% of the state’s grid. While the interconnection queue currently holds over 400 GW of proposed projects, realistic completions will depend on factors like permitting, transmission upgrades, and economic viability. The goal is to meet projected peak demand, which could reach 150 GW by 2030 and over 200 GW in high-growth scenarios—nearly double today’s levels.
Now, regarding pricing: This capacity growth will have a mixed impact on electricity costs. In the short term (2026-2027), increased supply from low-cost renewables could stabilize or slightly reduce average wholesale prices, potentially dropping to around $35/MWh in 2026 before edging up. Retail residential rates might see modest increases of 3-5% annually, keeping them in the 14-19 cents per kWh range.
Over the medium term (2028-2030), however, demand is likely to outpace supply in many forecasts, leading to tighter markets and higher volatility. Wholesale prices could rise by about 25% from 2025 levels (to around $62.50/MWh), while retail rates may increase by up to 29%, adding roughly $220 per year to the average household bill. In the longer term (2031-2036), if expansions keep pace, prices might stabilize at $40-60/MWh wholesale and 18-25 cents/kWh retail. But in scenarios where growth lags, we could see surges of up to 74% in wholesale costs by 2035, potentially adding $480 annually to bills. Factors like natural gas prices (projected at $3-4/MMBtu), weather events, and transmission investments will play key roles in moderating these trends.
At SEM, we specialize in helping customers like you lock in competitive rates and choose plans that hedge against volatility—whether through fixed-rate options, renewable energy credits, or time-of-use pricing. Our track record with 1,000 customers demonstrates our commitment to transparency and savings, often beating market averages by 10-15%.
If you’re interested in exploring how we can tailor an electricity plan to your needs amid these changes, I invite you to contact me directly at 713-253-1162 or [email protected]. Let’s discuss your options and ensure you’re positioned for the best value in Texas’s evolving energy market.
