Texas Grapples with How to Power New Data Centers That Consume More Energy than Cities

The Electricity Reliability Council of Texas, the state’s grid operator, says the rapid growth of data centers is straining the state’s electricity supply and infrastructure.

As Arcelia Martin reports in an article for The Texas Tribune and Inside Climate News, new factories and commercial facilities created a predictable rise in demand for electric grids. “The grid had to maintain only a minimal transmission capacity buffer to absorb changes while balancing costs to ratepayers.” Now, the volume of demand from data centers is changing that equation, forcing utilities to change their processes to keep the grid reliable. 

“In September 2024, ERCOT was tracking 56 gigawatts in large load interconnection requests. Now, that number has almost quadrupled to 205 gigawatts.” Of that, more than 70 percent of requests are from data centers, and 10 percent are from cryptocurrency operations. Although the requests do not necessarily equal true demand, ERCOT has to plan for it to reach peak levels and see demand spike in specific locations rather than being distributed across the state. 

ERCOT is trying to address these issues by incentivizing companies to reduce their electric demand particularly during peak hours and install onsite power plants or backup generators, as well as changing its planning procedures by evaluating multiple proposed projects in one study to speed up interconection.