Capacity, Demand, and Reserves Report

The Electric Reliability Council of Texas (ERCOT) recently released its 2025-2029 Capacity, Demand and Reserves (CDR) report. The report has been much anticipated since it includes changes in the data since last summer and modifications in the methodology behind the analysis. The CDR has distinct differences compared to the annual North American Electric Reliability Corporation (NERC) Long-Term Reliability Assessment (LTRA) released each December.

First, the CDR shows immense load growth in its accounting criteria from inclusion of new large loads (data centers, oil and gas, hydrogen manufacturing, etc.). This is because of HB-5066 from the 88^th Texas Legislature, which has a lower requirement of commitment by the load for inclusion in the CDR compared to the LTRA’s thresholds. Most of the growth is from firm (24x7x365) loads, only a portion of which are flexible and expected to shut down during high demand/prices.     

Second, resource additions in the CDR are now subject to stricter accounting per recent stakeholder-approved Protocol changes. They now require a “notice to proceed” letter to the transmission company and financial security in addition to the signed interconnection agreement. The CDR includes publicly announced retirements of additional generating units, impacting future resource capacity projections. Renewables have a lower capacity credit due to ERCOT’s shift to a probabilistic method—Effective Load Carrying Capacity (ELCC)—rather than averaging historical contributions. ELCC is commonly used by other Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs). The Texas Interconnection has over 300 GW of capacity in the interconnection queue, but most of this is in early screening stages and therefore not counted in the CDR (or the LTRA). 

The result of these accounting changes is reserve margin declines compared to the LTRA, with potential for peak load shortages as soon as 2027 in the primary scenario.  In addition, the CDR tracks the “net load peak” (load minus renewable generation, or what energy thermal generation plus batteries must supply) as well as peak load by itself. The combination of expected high solar and anticipated crypto-mine shutdowns during the hottest summer hours pushes both peaks later in the day, with the CDR’s primary scenario showing highest demand and net load occurring at the hour ending at 10:00 p.m. CDT in the summer of 2028. The CDR also includes three other scenarios reflecting potentially lower load growth, more load flexibility, and additional resources, but all indicate hours with the tightest reserve margins shifting to later in summer evenings—amplifying similar observations in the LTRA.