Gas power leapfrogs wind for first time in 10 years in Texas’ grid connection queue

For the first time in nearly a decade, gas power projects have surpassed wind power in Texas's Electric Reliability Council of Texas (ERCOT) interconnection queue, the waiting list for new electric generators. This shift, which began in January 2016, is largely attributed to the "explosion" of data centers flocking to the state, driven by the artificial intelligence boom and their need for consistent, 24/7 power, according to University of Texas professor David Spence. While not all projects in ERCOT's queue are ultimately built, it provides an early indication of future grid evolution. Gas projects in the queue have jumped over 400% in the last three years to nearly 64,000 megawatts, while wind projects grew 87%. This gas ramp-up is supported by the Texas Energy Fund, a program passed by the Texas Legislature in 2023 that offers low-interest loans for dispatchable power. ERCOT CEO Pablo Vegas welcomed this trend, emphasizing the market's historical failure to value dispatchable energy, which is crucial for grid reliability. However, bringing gas-fired power online faces hurdles, including a major supply chain bottleneck for gas turbines, with orders potentially taking until 2031. Data centers and developers are finding creative solutions, such as repurposing aircraft or cruise ship turbines. Examples include an El Paso utility planning to build a 366-megawatt gas plant for a Meta data center using 813 small generators, and xAI's purchase and revival of a dormant power plant in Mississippi for its data center. Conversely, wind power's market share has shrunk due to multiple factors. After two decades of growth, prime development locations in West Texas and coastal regions are largely saturated, leading to transmission line congestion and curtailment risks. The declining cost of solar energy, which has fallen more rapidly than wind, also makes solar a more attractive business decision. Furthermore, policy uncertainty, including federal approvals and the Federal Aviation Administration's (FAA) 200-foot rule, has deterred investors from the wind industry, according to Judd Messer, Texas vice president of the Advanced Power Alliance.