Texas electricity prices soar 6,000 percent as a fresh heat wave is expected to shatter records – Spot electricity prices jumped to $4,750 per megawatt-hour from the average of $75

Projected system-wide price for the Texas electricity grid on 20 August 2023. By 8:00 PM, the price was expected to rise to nearly $1000 per megawatt-hour. Graphic: ERCOT

By Jason Ma
18 August 2023

(Insider) – Texas power prices soared 6,000% on Thursday as a fresh heat wave is expected to shatter temperature records in the coming days.

Spot electricity prices jumped to $4,750 per megawatt-hour Thursday afternoon from the average of $75 on Wednesday afternoon, according to data from grid operator Electric Reliability Council of Texas (ERCOT) cited by Bloomberg.

At that level, prices neared the $5,000 cap and represented the highest in more than five weeks, the report said.

The price spike came as an excessive heat warning was issued for north Texas, which includes the Dallas-Fort Worth area.

Supply and demand data for the Texas electricity grid on 20 August 2023. Graphic: ERCOT

The warning for the region will remain in effect through Sunday night, and during that span high temperatures are expected to range between 105 and 113 degrees.

This summer has seen brutal heat waves for Texas and large swaths of the US, as well as Europe and other parts of the Northern Hemisphere. In June, Texas power prices doubled in a single day ahead of an earlier record-breaking streak.

The Texas power market is deregulated and on its own electricity grid. But while it has experienced massive spikes in demand this summer, with Thursday nearing the record high of 85.5 gigawatts, supplies have held up.

That’s due in part to gains in renewable energy. Texas generated about 40% of its power from natural gas last year, with wind accounting for about 25% and solar energy also contributing, according to ERCOT.

Texas electricity prices soar 6,000% as a fresh heat wave is expected to shatter records