Growth in electricity demand in Texas has been met through increasing amounts of all sources of generation, but renewable sources have grown the fastest. Increased output from renewable sources (mostly wind generators located in the western portion of the state) has important implications for the operation of the electric grid in the state.
The Texas electric region serves 85% of the load in Texas, whose grid is operated by the Electric Reliability Council of Texas (called ERCOT; the remaining portions of the state are in the Central electric region). ERCOT is not synchronously interconnected with the rest of the U.S. grid, meaning that it cannot readily exchange electricity with neighboring regions.
In the Texas region, a combination of robust economic growth that outpaced growth in supply and high demand for air conditioning during warm summers has led to strain on the electric system during summer months. In August 2011, the warmest month on record in the state, there were severe spikes in wholesale electric prices as well as emergency actions taken by the grid operator. The region did not meet its target reserve margin in the summers of 2012 or 2013; however, cooler weather in summer 2013 helped relieve the strain seen in prior years.
Texas has added coal- and natural gas-fired capacity since 2011; however, the largest share of capacity growth has been from wind generators, mostly located in western Texas. Texas leads the nation in wind power generation and was the first state to reach 10,000 megawatts of wind power generating capacity. To move electricity generated from these new sources to meet demand in the more heavily populated eastern portion of the state, the Public Utility Commission of Texas established a series of Competitive Renewable Energy Zones in 2005. The projects under this program have included upgrades to substations and additional transmission lines, all of which were designed to bring new generation from renewable sources in the western areas of Texas to electricity markets in the eastern areas.