By Eric Stoynov / Unsplash
By Peyton Lederman | The Now Daily
Texas Puts Data Center Permits on Hold
Texas Gov. Greg Abbott ordered state regulators Monday to halt permits sought by data centers while officials examine how the rapidly growing industry could affect the state’s electric grid, water supplies and surrounding communities. The Sept. 21 directive instructed the Texas Commission on Environmental Quality not to move forward with permits for data center projects until ongoing state audits are completed. Texas.gov
The decision represents a significant step as Texas deals with enormous demand from proposed data centers, many of them associated with the expansion of artificial intelligence and cloud computing. Abbott said new facilities must cover their infrastructure costs and demonstrate that their operations will not threaten resources needed by Texas residents. Texas.gov
Data Centers Could Place Huge Demands on the Grid
The rapid growth of artificial intelligence has created demand for facilities capable of housing thousands of servers and other computing equipment. Those operations can consume tremendous amounts of electricity, making their expansion an increasingly important issue for the Texas power grid.
Reuters reported that more than 470 gigawatts of proposed data centers and other large electricity users were seeking connections to the Texas grid when the state began tightening its review process. That amount is more than five times Texas’ peak electricity demand, illustrating why state leaders are taking a closer look at which proposed projects are realistic and how they could affect existing customers. Reuters
ERCOT Audit Examines More Than Electricity
The review isn’t limited to how much power the facilities could consume. ERCOT is gathering information about proposed data centers’ dependence on grid electricity, on-site generation, water consumption, cooling systems, tax benefits, ownership and potential effects involving noise, traffic and lighting. ERCOT
The state is particularly interested in large projects. ERCOT’s request for information covers developers of data centers with proposed loads of 25 megawatts or more that are pursuing connections to the ERCOT system. Developers covered by the request have until Oct. 12 to provide information, with ERCOT planning to publish a report by Dec. 10. ERCOT
Water Use Is Also Under Scrutiny
Electricity isn’t the state’s only concern. Large data centers can require water for cooling, making their expansion relevant to Texas communities already planning for long-term water demand.
Abbott previously directed the Texas Water Development Board to strengthen enforcement of data center water-use reporting requirements. The water board is now working alongside ERCOT and the Public Utility Commission as officials collect information about proposed facilities and their potential impact on Texas resources. Texas.gov
What Happens Next
For now, developers face a much more cautious regulatory environment in Texas. Abbott’s directive says data centers must pay for the electrical infrastructure required to serve them, report electricity and water consumption and complete the state’s audit process. He also said data centers should not consume water needed by local communities. Texas.gov
The audits could ultimately help determine how Texas balances two competing priorities: remaining a major destination for artificial intelligence and technology investment while ensuring the infrastructure supporting that growth does not create additional costs or resource problems for residents.
Excerpt: Texas has halted state permits for data centers while regulators investigate how the industry’s rapid expansion could affect the state’s electric grid, water supplies and local communities.
Primary source: Texas Governor’s Sept. 21 announcement