Texas grid strains under data center boom

Texas is rapidly becoming a data center hub, with 448 facilities consuming 9,402 MW of electricity. Experts predict this number could increase tenfold by 2030, potentially requiring ERCOT to more than double its 2024 grid capacity by 2031. ERCOT is developing a new "batch study" process to evaluate interconnection requests from data centers and other large power users. This aims to address the surge in requests and avoid a "doom loop" where projects get stuck in the approval process. Developers may need to pay nonrefundable fees to have their projects studied sooner. While electricity demand is a major concern, water usage for cooling data centers is also a growing issue. A mid-sized data center can use approximately 300,000 gallons of water daily, while larger ones can consume up to 4.5 million gallons. The rapid growth of data centers is largely driven by the expansion of AI and the availability of cheap natural gas, land, and business-friendly regulations in Texas. ERCOT expects data centers to drive grid demand to exceed 40 gigawatts by 2028.