Data centers are booming in Texas. What does that mean for the grid?

The rise of artificial intelligence, the digitization of the economy and everyday life’s growing computing needs have turbocharged the expansion of data centers, driving up a surge in electricity demand in Texas and across the country. Texas’ main grid operator predicts power demand will nearly double by 2030, in part due to more requests to plug into the grid from large users like data centers, crypto mining facilities, hydrogen production plants and oil and gas companies. In Texas, the U.S. Energy Information Administration predicted that demand from large users — including but not limited to data centers — would grow by 60% this year, making up around 10% of the total forecast demand on the state’s main grid. That includes data centers and other large users like crypto mining facilities, which represent the biggest share of large users looking to connect to the grid, according to ERCOT. Lawmakers this session will likely consider whether companies should be forced to do so, with the Texas Senate Business and Commerce Committee recommending that large loads be required to “offset their impact on the grid by adding on-site power systems or participating in programs to curtail electricity usage during peak demand periods.” Judging whether data centers and other large projects might actually build in Texas after requesting ERCOT consideration remains difficult, experts testified to lawmakers last year, making ERCOT’s demand prediction less certain.