As oil and gas operators move to electrification to reduce emissions, the causality could be an overloaded West Texas electricity grid, Enverus Intelligence Research (EIR) said in an April 30 report.

“We see Far West Texas power demand more than doubling by 2040 due to electrification trends and cryptocurrency mining growth,” said Riley Prescott, senior associate at EIR. “We believe the Far West zone in ERCOT will see enough load growth to support significantly more renewable development without curtailments."

However, within the next few years the region will need a large power generation buildout to meet forecast load demand.

“Without it, we expect power prices in the area will rise significantly,” Proscott said. “We believe that the low prices seen in the Far West could be disrupted by new load drivers including electrification of oil and gas assets and cryptocurrency mining growth.”

The Enverus report also notes:

  • ERCOT’s Far West Texas power demand will more than double by 2040 due to electrification trends and cryptocurrency mining growth. With this increased load comes a need for additional generation buildout, otherwise power prices will rise significantly.
  • Without an increase in levels of queued generation in ERCOT’s Far West load zone, EIR expects net exports to continue to decrease. This presents an opportunity for generation within the region to expand capacity to meet peak load and export to East Texas.
  • Natural gas combustion, specifically compression, is the most practical emission source to electrify by connecting to the grid, as these emissions mostly come from stationary sites with long expected lives.
  • A fundamental shift began in 2022 as load growth increased relative to wellhead gas production. This was due to early electrification efforts in the Permian Basin and a migration of cryptocurrency mining load to Texas following China’s crackdown on miners in mid-2021.
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