Texas power demand is increasing faster than previously thought, according to a new report from the Electric Reliability Council of Texas (ERCOT), which operates most of the state’s power grid. Texas gets more than half of its power from natural gas-fueled generation.

While reserve margins have dropped for the next several years compared with earlier forecasts, they remain sufficient to support system reliability, ERCOT said.

“…[W]e continue to see sufficient planning reserve margins through most of the 10-year planning horizon,” said Warren Lasher, senior director of system planning. “That outlook shows planning reserve margins ranging from 16.9% to more than 20% in the next five years, the period that best reflects plans by owners and developers to add new generation resources.

“Thanks in large part to a healthy economic outlook, the ERCOT region expects to see customer demand grow at higher levels than previously projected.”

According to the annual Capacity, Demand and Reserves report, in the summertime natural gas is expected to account for 63.5% of generation in 2017, 62.9% in 2018, 63.5% in 2019, 63.6% in 2020, and 63.7% in 2021. In the winter the natural gas share of generation is expected to be 64.5%, 64.6%, 64.9%, 65.6%, and 65.5%, respectively.

The forecast includes the expected effect of a new liquefied natural gas facility currently under development on the Gulf Coast, but it does not include possible impacts of the proposed addition of Lubbock Power and Light to the ERCOT system, which is being considered by the Public Utility Commission of Texas, the grid operator said.

Based on average weather in the past 14 years, the peak demand for summer 2017 is forecast to reach nearly 73,000 MW, growing to more than 77,000 MW by summer 2021.

“While generation resource development in the next several years is expected to keep up with this growing demand, we also could see a number of existing resources retire,” Lasher said.

Current information indicates that ERCOT can expect more than 82,000 MW of resource capacity for summer 2017, growing to more than 88,000 MW by summer 2021. The report includes all existing generation resources that have not notified ERCOT of plans to cease operations, as well as planned resources that have secured interconnection agreements to connect to the transmission grid, any necessary air permits, and water use contracts where needed. Planned resources account for nearly 3,600 MW of expected resources next year and reflect more than 10,000 MW of expected capacity by 2021, ERCOT said.