Texas Electricity Generation Mix

By the TexasPowerCost Editorial Team — independent Texas electricity analysis · Last reviewed October 18, 2026 · how we analyze plans

Last updated: October 18, 2026  ·  7 min read

Texas generates more electricity than any other U.S. state — and from a more diverse mix of sources than most people realize. Natural gas, wind, nuclear, solar, coal, and a small amount of hydro all flow into the ERCOT grid that powers roughly 26 million Texans. Understanding what generates that electricity explains why prices spike, why overnight electricity is cheap, and what "100% renewable" plans are actually buying.

Natural Gas — The Price Setter

Natural gas is Texas's dominant electricity source, generating roughly half of all ERCOT output annually. The state's gas plants range from large combined-cycle facilities that run nearly continuously to small "peaker" units that only switch on during peak demand. That distinction matters for your bill.

In wholesale electricity markets, the price is set by the most expensive plant running at any moment — the marginal unit. In Texas, that marginal unit is almost always a natural gas plant. When gas prices rise due to cold weather, pipeline constraints, or global LNG demand, wholesale electricity prices rise with them. Customers on variable-rate or indexed plans feel this directly. Customers on fixed-rate plans are shielded — their REP absorbed that price risk when designing the plan.

Wind — Texas's Cheapest Power Source

Texas is the largest wind power state in the United States by a wide margin — more installed wind capacity than most countries. Wind provides roughly 25% of ERCOT's annual generation, concentrated in West Texas and the Texas Panhandle where sustained winds are strongest.

Wind has zero fuel cost. When wind turbines are running, they push down the wholesale price because they offer electricity at near-zero marginal cost. This effect is most pronounced overnight, when Texas wind peaks and demand is low — wholesale prices regularly drop to $10–$20/MWh or even negative during high-wind, low-demand periods. That overnight price suppression is what makes free-nights plans economically viable for REPs to offer.

The 2013 completion of the Competitive Renewable Energy Zone (CREZ) transmission buildout — roughly 3,600 miles of new high-voltage lines connecting West Texas wind to Dallas, Houston, and San Antonio — unlocked the current scale of Texas wind. Before CREZ, transmission bottlenecks stranded much of the wind that turbines could generate.

Nuclear — Reliable Around the Clock

Texas operates two nuclear power plants: Comanche Peak (near Glen Rose, southwest of Fort Worth, operated by Luminant) and South Texas Project (near Bay City, southwest of Houston, operated by NRG). Together they have approximately 5,000 MW of combined capacity and generate roughly 10% of ERCOT's annual electricity.

Nuclear is baseload generation — it runs 24 hours a day, 7 days a week at or near full capacity. Unlike gas peakers that switch on only when needed, nuclear plants produce power continuously at very low marginal cost. This steady output provides a reliability floor under the grid, particularly during overnight hours when wind generation is high but solar is off.

Nuclear plants did not fail during Winter Storm Uri in any meaningful way — both Texas plants continued operating. Their consistent output makes them an underappreciated grid reliability asset.

Solar — The Fastest-Growing Source

Utility-scale solar has grown from essentially nothing in 2015 to 8–12% of annual ERCOT generation by the mid-2020s, with capacity additions continuing at pace. Texas is now among the top three solar states nationally by installed capacity.

Solar's generation profile is the mirror image of wind's: it peaks mid-afternoon and is zero at night. On sunny spring days, surplus solar can push midday wholesale prices to very low levels — or even negative. This is good for the grid's carbon intensity during daylight hours but creates a demand pattern called the "duck curve," where net demand drops sharply midday then surges after sunset as solar output falls and air conditioning remains high.

For residential customers, the growth of utility-scale solar is quietly changing the economics of rooftop solar and time-of-use plans. As solar becomes the marginal generator more often during the day, midday wholesale prices stay low — which reduces the value of exporting solar to the grid at those times. How Texas solar affects your bill covers this in depth.

Coal — Declining but Not Gone

Coal once generated over 35% of Texas electricity. That share has fallen to under 10% as cheap natural gas and near-zero-cost wind have made coal uncompetitive in the ERCOT market. Several large coal plants have closed since 2020, and more retirements are expected through the late 2020s.

Coal still plays a role during high-demand periods when every available generator is needed. Its predictable, dispatchable output provides grid stability that intermittent renewables cannot, which is why the retirement pace has been gradual rather than abrupt.

Hydroelectric — Texas's Smallest Slice

Texas has a small amount of hydroelectric capacity — less than 1% of ERCOT generation — primarily from dams on the Colorado, Guadalupe, and Pedernales rivers. The Highland Lakes chain near Austin (Lake Buchanan, Lake Travis, and others) includes the Buchanan Dam and Inks Dam hydroelectric facilities, operated by the Lower Colorado River Authority (LCRA). The Guadalupe-Blanco River Authority operates a small hydro facility on Canyon Lake.

Texas hydro output is weather-dependent and modest. It has no meaningful influence on statewide electricity prices and is not a significant source in the ERCOT generation mix.

How the Mix Affects Your Monthly Bill

Source	When It's Cheap	When It's Expensive	Plan Impact
Natural gas	Mild weather, mild gas markets	Winter freezes, summer heat, LNG export demand	Fixed rate protects you; variable/indexed exposes you
Wind	Overnight, spring shoulder seasons	Calm hot summer afternoons	Enables free-nights plans; cheap RECs for green plans
Nuclear	Always (baseload)	Unplanned outages only	Grid reliability floor; dampens overnight wholesale prices
Solar	Sunny days, midday	Nights, clouds, winter	Suppresses midday wholesale; growing share of green plans
Coal	Moderate demand periods	High demand (runs at full capacity regardless)	Backup capacity; shrinking role

The Texas Grid Is Getting Cleaner — Slowly

The ERCOT generation mix in 2025 is meaningfully different from 2015. Wind has roughly tripled. Solar has grown from near-zero to a double-digit share. Coal has halved. But natural gas remains the backbone — dispatchable, reliable, and still the price-setting fuel for most hours of the year.

For consumers, the practical takeaway is that Texas wholesale prices will remain gas-linked for at least the next decade. The best protection against gas price volatility is a fixed-rate plan. The cleanest and most affordable way to support renewable growth is a 100% wind or solar plan — Texas REC prices are among the lowest in the country because wind supply is so abundant.

Related Guides

Texas Wind Energy — How It Affects Your Bill · Texas Solar Energy — Utility Scale and Rooftop · What "100% Renewable" Really Means in Texas · Renewable Energy in Texas — The Honest Guide

Frequently Asked Questions

What generates the most electricity in Texas?

Natural gas is Texas's largest electricity source, generating roughly 45–50% of annual ERCOT output. Wind is second at approximately 25%, nuclear third at around 10%, and solar fourth at 8–12% and growing rapidly. Coal has declined sharply and now accounts for less than 10% of generation. Hydro is less than 1%.

Why does my electricity bill spike in summer even on a fixed-rate plan?

Your energy rate doesn't change on a fixed-rate plan — but your usage does. Texas summers push home cooling to 2,000–3,000 kWh per month in larger homes, versus 600–900 kWh in mild months. The summer spike is a usage problem, not a price problem. Wholesale prices do spike in summer for customers on variable or indexed plans because peak gas generation is expensive.

Does Texas generate nuclear power?

Yes. Texas has two nuclear power plants — Comanche Peak (near Glen Rose, southwest of Fort Worth) and South Texas Project (near Bay City, southwest of Houston). Together they provide roughly 10% of ERCOT's annual electricity generation. Nuclear is baseload generation: it runs 24/7 at near-full capacity and is one of ERCOT's most reliable power sources.

Is Texas electricity getting greener over time?

Yes, substantially. Wind generation has roughly tripled since 2010 following the CREZ transmission buildout. Solar capacity has grown from near-zero to 8–12% of annual generation in a decade. Coal has declined from over 35% in 2010 to under 10% today. The trajectory is clear, though natural gas remains dominant and will likely remain so for grid reliability purposes through the 2030s.

Does Texas have hydroelectric power?

Yes, but very little. Texas hydroelectric capacity is less than 1% of total generation — primarily from dams on the Colorado, Guadalupe, and Pedernales rivers, including the Highland Lakes chain near Austin. Hydro is not a meaningful contributor to the ERCOT grid compared to Texas's other generation sources.

How does the generation mix affect electricity prices?

The mix determines what the "marginal" generator is at any given moment — the most expensive plant needed to meet current demand. In Texas, natural gas plants most often set the marginal price. When gas prices rise (cold snaps, global LNG demand), wholesale electricity prices rise proportionally. Wind and solar, having zero fuel cost, suppress prices when they're generating but cannot guarantee availability during peak demand periods.