ERCOT to grow at an average rate of 11 percent in 2025 and 2026
Retail electricity sales are forecast to soar across the Electric Reliability Council of Texas (ERCOT) and the PJM Interconnection grids, with data centers the main driver.
According to the US Energy Information Administration’s (EIA) latest Short-Term Energy Outlook, demand in the ERCOT region is forecast to grow at an average rate of 11 percent in 2025 and 2026, with PJM growing by 4 percent. In comparison, nationwide US electricity sales are projected to grow at an annual rate of 2.2 percent, which remains much higher than the average growth of 0.8 percent between 2020 and 2024.
According to GridStrategies, data center demand could grow from as little as 10GW to as much as 65GW through 2029. Much of the new growth will be concentrated in the PJM and ERCOT markets. In a 2025 update by ERCOT, peak demand is expected to increase by 46.8GW through 2029, and in PJM, it's forecast to increase by 24.8GW.
The electricity sales spike in the near term within the ERCOT region is expected to be driven by new large data centers and cryptocurrency mining facilities coming online. In the long term, ERCOT has estimated that data center energy demand across its coverage area could rise to 78GW by 2031.
Notable developments in the Lone Star state include Crusoe’s 200MW+ Abilene data center campus, which is currently under construction, QTS’s planned data center campus in Dallas, and Microsoft's latest data center development in San Antonio.
However, there are concerns that the growth could put undue strain on the ERCOT grid infrastructure. ERCOT has said that it will likely require thousands of miles of new long-distance transmission lines, which could cost more than $30 billion.
In the PJM grid, the projected growth comes as concerns arise over the impact of data center developments on ratepayers’ electricity bills. The operator recently closed its annual capacity auction, which saw the cost of wholesale electricity grow by 22 percent compared to last year.
PJM supplies the world's biggest data center markets, including Virginia and Ohio. As a result of the growth, bills for electricity have begun to soar, with Columbus, Ohio, seeing average residential bills increase by $27 a month.
Despite this, there seems to be no let-up in the growth, with Dominion Energy, the main utility supplier to the Virginian market, reporting that it had approximately 40GW in various stages of contracting as of December 2024.
PJM Interconnection's coverage area covers all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.
