Spurred by data centers and population growth, demand for electricity in Texas is expected to nearly double by 2034. State lawmakers plan to help meet this surge in demand by directing up to $7.2 billion in taxpayer-funded loans and grants towards building new fossil fuel-fired generating capacity within the state’s main power grid, the Electric Reliability Council of Texas (ERCOT).  

As of April 2025, an Environmental Integrity Project analysis and inventory of proposed natural gas-fired power projects in Texas contained 130 projects. Cumulatively, these projects could generate over 58 gigawatts of electricity and supply power to over 14.6 million residential ERCOT customers during peak demand hours – but not without contributing to climate change and degrading air quality across Texas.

The Environmental Integrity Project analysis estimated that, if built, these projects could emit over 115 million metric tons of carbon dioxide equivalent greenhouse gases every year. Of these greenhouse gas emissions, approximately 110 million metric tons would be emitted directly by the gas power plant projects, and 5 million metric tons would come from associated increases in natural gas production, processing, and transportation. That’s equivalent to the annual greenhouse gas emissions from 26.8 million cars and trucks driven for one year or 30 coal-fired power plants.

Texas lawmakers are fueling this proposed gas-fired power plant boom through the Texas Energy Fund  — a program that provides funding for new power generation but excludes solar, wind, and energy storage projects. To date, the fund has almost exclusively advanced applications for natural gas-fired power plants.

Beyond climate-warming greenhouse gases, this buildout of gas power plants could degrade local air quality in communities across Texas. Gas power plants emit nitrogen oxides (NOx), volatile organic compounds (VOCs), sulfur dioxide (SO₂), fine particulate matter (PM_2.5), carbon monoxide (CO), and a whole host of hazardous air pollutants (HAPs). These pollutants can degrade air quality and pose serious threats to human health. For instance, PM_2.5 exposure can cause respiratory issues and has been linked to increased risk of heart disease. Gas power plants also release nitrogen oxides, which can harm the respiratory system and can react with other chemicals in the air to produce ground-level ozone — a component of smog — and particulate matter. Using Clean Air Act permit documents, EIP gathered information on pollutants that could affect local air quality for 45 projects:

To help track this gas-power buildout, the Environmental Integrity Project created a project inventory using a variety of publicly available data sources, like Global Energy Monitor’s Global Oil and Gas Plant Tracker,  Energy Information Administration data, the Texas electric grid operator’s databases, and documents from the Texas Energy Fund. The inventory provides information on a project’s estimated generating capacity, location, estimated completion date, and Clean Air Act construction permit information where available.

Map of proposed gas power plants in Texas

Multiple proposed gas power plants with known locations would be built in areas already polluted with ozone or fine particulate matter. The Clean Air Act requires the Environmental Protection Agency to set national air quality standards for certain pollutants, including ozone and fine particulate matter.  

EPA has identified areas in Texas that are in nonattainment with 2015 ozone standards or in preliminary nonattainment with newly revised fine particulate matter standards from 2024. Of 54 proposed gas power plant projects with known locations, 14 would be located in ozone nonattainment areas or preliminary PM_2.5 nonattainment areas. The last thing a community already saddled with ozone or fine particulate matter pollution needs is a new gas-fired power plant, which would emit more fine particulate matter and ozone-forming pollutants.

Proposed gas power plant projects and nonattainment areas

Despite the considerable potential air pollution from this new wave of gas power plants, Texas’s environmental regulator - the Texas Commission on Environmental Quality (TCEQ) - is approving permits for some of these projects at a rapid clip using weaker permits. For instance, the proposed 900-Megawatt EmberGreen Energy Center in Wharton County, Texas, received authorization to construct under a general permit just one day after submitting their application. Not only is that turnaround time unusually fast, but authorizing large power plants through standard permits allows them to bypass more stringent pollution controls that should be required for large sources of air pollution under the Clean Air Act.

On April 28, EIP and the Sierra Club sent a letter to EPA and the Texas Commission on Environmental Quality demanding an end to the state agency’s illegal issuance of permits for major sources of air pollution that lack the stringent limits on emissions required by the Clean Air Act. The letter and EIP’s new analysis cite three examples of illegally permitted plants, two near Houston and one near Corpus Christi.

“A large number of new gas-fired power plants may be built in Texas over the next few years, encouraged by low-interest loans and grants offered through the Texas Energy Fund,” the letter states. “TCEQ and EPA must ensure that these new plants are permitted in keeping with the Clean Air Act’s requirements.”

Texas’s precise future electricity demand is uncertain, with many factors that make it difficult to predict how much power will be needed years down the road.  

Nevertheless, current projections point to a surge in demand from industrial users in Texas over the next few years. Specifically, demand is predicted to spike due to new data centers--specialized facilities that house and manage an array of computer systems to store, process, and distribute data and enable artificial intelligence and cryptocurrency mining.  

As of 2023, Texas was already estimated to have the second highest electricity demand from data centers of all U.S. states, and recent projections show that of new electricity demand from large industrial users expected to come online by 2031, over 50 percent -- 32.6 gigawatts-- is expected to come from new data centers. Three gas power plants in EIP’s inventory, capable of generating 1,800 megawatts, are being developed to power data centers for AI-focused companies.  

Texas already outpaces all other states in combined wind, solar, and battery capacity. With demand likely to keep growing, many energy analysts and even the head of the state’s electric grid operator are calling for lawmakers to avoid passing laws that punish renewables and only boosting natural gas.  

“Characterizing renewables as a problem, I don’t think is helpful to the conversation. I don’t think it’s accurate,” said Pablo Vegas, CEO of the Electric Reliability Council of Texas, according to the San Antonio Express-News.  

Lead photo: The Lake Hubbard Power Plant in Dallas County, Texas. Photo by iStockphoto.