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Texas Grid Strains Under City-Sized Data Centers

A massive wave of energy-hungry data centers—driven by AI, cloud computing, and crypto—has overwhelmed the Texas grid.

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📅 Today's Story: A massive wave of energy-hungry data centers—driven by AI, cloud computing, and crypto—has overwhelmed the Texas grid. State regulators and ERCOT are scrambling to adapt before things get any worse under the load.

ENERGY


Texas Grid Strains Under City-Sized Data Centers

Power lines over a substation outside of Nacogdoches (Source: Texas Tribune)

📰 What Happened: Texas is facing an unprecedented spike in electricity demand, driven primarily by data centers seeking grid access. Large load interconnection requests soared from 56 gigawatts in 2024 to 205 gigawatts today, more than double ERCOT’s peak demand record, forcing grid planning revisions.

🔍 A Closer Look: Many proposed data center projects demand over one gigawatt each—more than some cities consume. ERCOT is exploring accelerated approvals for facilities that agree to reduce power use during tight grid conditions. It’s also considering bundling project studies to speed up planning across utilities.

🧠 Why It Matters: If Texas can’t modernize its grid and streamline approvals, power shortages and reliability risks could escalate. At stake is the state’s attractiveness to tech-driven investments. Grid reforms must balance speed, certainty, and reliability as AI-era energy demands continue to surge.

 

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