ERCOT State of the Grid

April 16, 2025 

ERCOT recently released its State of the Grid Report. The report highlights four major challenges facing the grid in order to ensure reliability, resilience, and affordability.

Accelerating Demand

ERCOT sees accelerating demand growth over the next 10 years that will pressure existing infrastructure and spur the development of new supply and innovations to meet this challenge.

Need for More Transmission Capacity

With growing demand, ERCOT clearly needs more transmission capacity to deliver electricity – especially in the Permian Basin, where the electrification of oil and gas operations is important. This has led to studies and discussions about how a new 765-kV infrastructure could benefit Texans, and a decision is expected in Q2 2025.

Imbalanced Generation Development

New generation growth has shifted to solar and battery storage, which are outpacing the growth of new thermal generation due to market economics. These resources offer significant benefit to the supply mix in ERCOT; however, to best serve Texas’ growing economy, a balanced portfolio of resources that includes dispatchable and long-duration energy supply is a critical characteristic of a reliable grid.

Growing Thermal Generation Risk

The risk to the entire market is increasing as thermal power plants age and retire. For example, today, 42% of the thermal generation fleet in ERCOT is more than 30 years old. ERCOT is concerned about when and how these critical, dispatchable resources will be replaced – especially if wholesale pricing remains low. In 2024, the ERCOT wholesale market had the lowest inflation-adjusted prices in 10 years.