The Texas Power Paradox
On August 3rd, something caught my attention. ERCOT had just hit an all-time peak load of over 91 gigawatts on July 22nd at 6 PM — up from the previous record of 85.5 gigawatts set in August 2023. So I pulled up the ERCOT dashboard around 1:15 PM Central and started watching in real time
Projected load for the day: just over 88 gigawatts. I started taking screenshots. As Rod Stewart sang on the first LP I ever bought — when I was 11 — every picture tells a story.
The demand side: new loads are real, and they're only getting bigger
The record growth isn't coming from residential air conditioners running overtime. It's large industrial loads. ERCOT's Large Load Working Group report from June puts simultaneous peak demand from large loads at 3,675 megawatts — a substantial chunk of the gap between the old record and the new one.
But here's what makes that number look almost modest: loads already approved to energize exceed 8,900 megawatts. Tens of gigawatts more sit in the interconnection queue. This story has a long way to go.
The supply mix: what's actually keeping the lights on
At 1:15 PM, with demand around 82 gigawatts and roughly 6 more gigawatts still to climb before the day's projected peak, real-time prices sat in the low $20 per megawatt-hour range. Day-ahead prices weren't much different. On what was shaping up to be one of the hottest days of the year.
Here's how the generation stack looked throughout that day.
Before 8 AM, the grid runs on conventional generation and wind. Nuclear — yellow on ERCOT's dashboard — sits at the bottom and just runs. 24/7, unless there's a scheduled outage. Coal and lignite hold fairly steady in the gray band above it. Natural gas, the purple slice, does the heaviest lifting in the morning. Wind contributes meaningfully overnight and into early morning, then fades as it tends to do in daylight hours.
Then around 8 AM, Apollo rides his chariot into the sky, raining down photons that solar panels across the state convert into electrons — tens of gigawatts of them.
Gas backs down. And the batteries — a rapidly growing fleet of storage resources shown in red — start doing something worth paying attention to: by 8 AM they're absorbing nearly 8.5 gigawatts of solar energy. That's close to 10% of peak load, pulled off the grid and stored for later.
By 1 PM, solar is generating more than 40% of the total mix. Wind sits at 6%. Gas at close to 37%. Coal and nuclear cover the remaining 15% or so. Storage, nearly fully charged, pulls back to nearly neutral — absorbing only 275 megawatts — and waits.
The cowboy hat and the duck
Plot combined wind and solar output over a Texas summer day and the shape is unmistakable. Wind tails off at midday, forming the brim. Solar peaks in the middle of the day, forming the crown. It looks like a cowboy hat. Some days it's more of a bowler or a derby depending on the wind, but the cowboy hat is the signature Texas summer shape.
California has the duck curve. Texas has the cowboy hat. Same physics, different headwear.
Storage: the real story of how this grid held together
By early afternoon, storage is essentially done charging — pulling in roughly 8,500 megawatts at its peak. The small oscillations in the data reflect batteries doing grid balancing work: absorbing and releasing energy in response to frequency signals faster than any conventional resource can respond. That was the original use case for grid-scale lithium-ion batteries, before solar made energy arbitrage so economically attractive.
Then evening comes. Prices rise. And those same batteries inject close to 10 gigawatts back into the grid over the 7 PM to 11 PM window.
The math isn't complicated. Charge at $15-20 per megawatt-hour in the morning. Discharge into evening peaks in the high $40 range. A 10% round-trip efficiency loss doesn't hurt much at that spread
California figured this out first — the original grid with large-scale solar influx. Where the duck lands, batteries follow. Texas is living the same dynamic, just with a cowboy hat instead of a duck.
The uncomfortable implication for gas
This setup — solar suppressing midday prices, batteries filling the evening gap — keeps prices low. Good for consumers. But it's a hostile environment for anyone trying to build new dispatchable gas generation.
Gas plants used to count on price spikes during peak summer days. Those were the windfalls that justified new investment. Now, on one of the hottest days of the year, real-time prices are in the low $20s. Existing gas still runs and still provides capacity the grid needs. But building new gas into this price environment is a hard financial case to make.
The question that actually matters
The current equilibrium works. The grid held up on a near-record day with prices that, by any historical standard, should not have been that low. That's genuinely impressive.
But neither demand nor supply is standing still.
The big variable is AI-driven data centers. Load growth from this sector alone could eventually exceed current total system demand. Governor Abbott added a complication this week, directing ERCOT and the Public Utility Commission to audit new data centers for water use, power use, and tax impacts. That may slow some interconnections at the margin. Significant load growth is likely anyway.
When that demand arrives at scale, the grid needs to add resources fast. The interconnection queue has plenty of renewable assets and some gas turbines waiting to connect.
The problem is transmission. Texas was planning a $33 billion expansion of a 765 kV superhighway designed to serve data center loads and the Permian Basin's growing oil and gas industry. Conservative landowners are fiercely opposing it. Several leading politicians are backing them, calling for transmission applications to be denied until all concerns are addressed.
No transmission means stranded resources in the queue can't reach load. Supply can't connect. Demand keeps growing. The stability and low prices we're looking at today start to look like a brief window rather than a durable condition.
That's the real story from August 3rd. Not just that Texas broke a record, but that it did it without adding meaningful fossil fuel capacity, while keeping prices remarkably low. The harder question is whether the infrastructure decisions being made right now will allow that to continue when load growth arrives in force. The pictures from that dashboard were encouraging. What comes next is less certain